Unpacking ZoomInfo’s IPO as the firm starts to trade

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

The ZoomInfo IPO slipped through our fingers in the last news cycle, so we’re going to catch up.

Founded in 2000, the company has had a somewhat complicated history. ZoomInfo raised a Series A in 2004, according to Crunchbase data, but that’s where its funding history stops. The firm, a SaaS operation that provides information on business people, later sold itself to private equity firm Great Hill Partners in 2017 for a reported $240 million. That wasn’t the end, however. ZoomInfo was later sold to DiscoverOrg for a sum reported to be more than $500 million. DiscoverOrg is a sales and marketing services company based in Washington state that has raised money from private equity.

As you can imagine given the transactions ZoomInfo has gone through, the company’s accounting is a mess to understand. It’s latest S-1/A has the following wording to describe what the IPO encompasses, just to give you a taste:

Immediately following this offering, ZoomInfo Technologies Inc. will be a holding company, and its sole material asset will be a controlling equity interest in ZoomInfo HoldCo, which will be a holding company whose sole material asset will be a controlling equity interest in ZoomInfo OpCo. ZoomInfo Technologies Inc. will operate and control all of the business and affairs of ZoomInfo OpCo through ZoomInfo HoldCo and, through ZoomInfo OpCo and its subsidiaries, conduct our business. Following this offering, ZoomInfo OpCo will be the predecessor of ZoomInfo Technologies Inc. for financial reporting purposes…..

You don’t need to understand all that. Instead, this morning, let’s take a few minutes to dig into the company’s recent earnings results, and its valuation. How is the market valuing this firm? And did its previous owners do well to pay as much as they did for the company?

IPO fundamentals