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Leading a start-up firm through an IPO
Digital Insight

Goal:
To create widespread market awareness of Digital Insight's online banking applications and build enthusiastic support for an IPO.

Approach:
Digital Insight (DI), created in 1995, set its sights on becoming the largest provider of Internet banking application services (ASP) to America's community banks. DI needed a PR firm that would be able to meet the challenges of representing a de novo organization, yet would have both the bandwidth and the experience to handle the needs of a rapidly growing company escalating toward IPO.

In the spring of 1998, DI retained Stephenson Group (SG) as its first public relations counsel. At that time, the firm served about 170 client institutions with approximately 190,000 active online banking customers. By year-end 1999, DI's client list soared to 739 institutions with 750,000 online customers.

One of most critical periods for a company anticipating an IPO is the year prior to hiring an investment banker and initiating plans for an IPO. The SEC determines "normal" PR activity for the firm based on activity during this baseline year. Firms cannot exceed this level of "normal" activity during the IPO process.

SG designed a program of PR activity for the baseline year that ideally positioned DI for IPO readiness, thereby maximizing returns on PR activity before, during, and after the IPO.

PR activities provided by SG in support of DI's IPO included:

  • Strategic guidance throughout the IPO process, including advising on the types and quantity of news that DI could release,
  • Preparation and monitoring of guidance documents for the IPO process, including the role of PR during each of the five phases of the process,
  • PR plan development specific for the IPO process,
  • Participation in strategic calls with internal and external legal counsel and coordination of PR with legal advisors,
  • Coordination of press activities for opening day,
  • Normal PR activities as allowed during IPO process, including guidance/editing on various IPO announcements initiated by investment bank legal advisors and the CFO.

Results:
On October 1, 1999, DI offered 4,025,000 shares of common stock at $15 per share. Share prices quickly rose to more than $32 on the first day of trading, and reached an ultimate high of more than $75 within five months.

More than 50 stories covering the firm and its successful offering were published within three months after opening day.