The IT services company had been planning an IPO.
SharedLabs Inc. was planning to launch an initial public offering in the coming days, but the Jacksonville-based IT services company instead announced an agreement Monday to merge with an existing public company.
Denver-based Glowpoint Inc. is technically acquiring SharedLabs by issuing shares of its stock to SharedLabs’ owners, but the current stockholders of privately held SharedLabs will end up with the majority of the stock.
SharedLabs will continue to operate under the same name from its Downtown Jacksonville headquarters, CEO Jason Cory said in a telephone interview Monday. Cory also said he will continue as chief executive after the merger.
The company recently moved into new headquarters offices in the Dyal-Upchurch Building at 6 E. Bay St. with the help of $100,000 in incentives approved in July by Jacksonville City Council. The company promised to create 107 new jobs as part of its incentives application.
Cory said the merger should not change that agreement.
“Our plan is to continue to add jobs here,” he said. “We’re out to hire the same number of people if not more.”
The deal with Glowpoint allows SharedLabs to go public without going through the IPO process. Glowpoint’s stock trades on the NYSE American exchange, and SharedLabs will become the publicly traded company once the merger is completed.
“It accomplishes our goal of access to capital markets,” Cory said. That would help SharedLabs to continue to grow by acquisition.
SharedLabs reported revenue of $36 million in the first half of this year. Glowpoint reported revenue of $6.8 million.
Glowpoint provides video collaboration and network applications. Cory said that business has significant room for growth as the company has not had the expertise on its staff to take advantage of 37 patents it holds.
“They’ve got projects they couldn’t get done,” he said.
Cory also said Glowpoint has been focused on its balance sheet, which is now debt free.
“They might have lost some traction on the sales side,” he said.
“They’ve been undervalued for some time.”
Under terms of the merger, Glowpoint will issue 112.8 million shares of its stock to SharedLabs’ stockholders.
Glowpoint’s stock closed at 17 cents Friday, making the value of the deal a little more than $17 million.
Glowpoint expects to have 58.5 million shares outstanding when the merger closes, which is targeted for the fourth quarter, so current SharedLabs stockholders will own the majority.
Cory is SharedLabs’ largest stockholder with 31.9 percent of the shares, according to the IPO filings.
SharedLabs’ latest filing said it had 567 employees as of Aug. 31., with additional offices in California, Texas, New Jersey, Virginia, Vermont and Montreal. Its city incentives application said it only had six employees in Jacksonville before moving to the new office.
Glowpoint said in its annual report it had 56 employees with offices in Denver and Oxnard, California.
Cory said it’s too soon to discuss what will happen to Glowpoint’s employees but in previous acquisitions by SharedLabs, “we’ve done pretty well at keeping employees in their seats.”