San Francisco-based file-sharing and cloud-storage company Dropbox Inc. raised its initial public offering price range by $2 per share and increased its estimated net proceeds from the offering and a concurrent private placement by $60 million, or potentially more.
At $19 per share, the midpoint of the new IPO price range estimate, the company said it expects net proceeds of up to $678 million from the offering and the private placement. That estimate assumes the IPO's underwriters fully exercise an option to purchase up to an additional 5.4 million shares after the first 36 million are sold. The 36 million includes 26,822,409 shares of class A common stock to be sold directly by the company, with the rest sold by existing shareholders. If the underwriters do not purchase the additional shares, the company estimates net proceeds of about $579.9 million.
Dropbox previously estimated its net proceeds from the offering and private placement would total about $617.4 million at $17 per share, assuming the underwriters' option to buy more shares was fully exercised. Each $1 increase or decrease to its share price would increase or decrease its net proceeds by about $25.6 million, the company said in its latest filing. The current estimated price range for the offering is $18 to $20 per share. The company will not receive any of the proceeds from the sale of the shares sold by the stockholders.
Salesforce Ventures, the investment arm of enterprise cloud services company Salesforce.com Inc., has agreed to buy $100 million of Dropbox's class A common shares in a private placement immediately subsequent to the IPO.
The Dropbox IPO is one of two major tech-related offerings announced in 2018. Streaming music company Spotify AB's parent Spotify Technology SA in late February filed for a $1 billion IPO offering, though the company later reduced the estimated size of the proposed IPO to $444.6 million. Also this year, cloud security firm Zscaler Inc. filed for a smaller IPO of up to $100 million in mid-February, but the company ultimately raised almost twice that in its IPO a month later. Zscaler's share price more than doubled from the IPO price of $16 to close at $33 on the company's first day of trading, March 16.
Dropbox has received approval to list its class A common stock on the Nasdaq Global Select Market under the symbol DBX.
Dropbox said it plans to use the proceeds from the offering and private placement to repay $193.1 million under a revolving credit facility. Proceeds also will be used for general corporate purposes, including working capital, operating expenses and capital expenditures.
Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Allen & Co. LLC, Merrill Lynch Pierce Fenner & Smith Inc., RBC Capital Markets LLC, Jefferies LLC, Macquarie Capital (USA) Inc., Canaccord Genuity LLC, JMP Securities LLC, KeyBanc Capital Markets Inc. and Piper Jaffray & Co. are serving as underwriters for the offering.