Rimini Street Finally Finds Its Way to Wall Street
January 15, 2018 Alex Woodie
As 2017 was coming to a close, Rimini Street quietly completed its quest to become a publicly traded company. But the firm, which provides third party support for DB2 for i and JD Edwards customers, didn’t go public through an initial public offering. Instead, it landed a listing on the Nasdaq by acquiring a company that already had one.
In October, Rimini Street completed the merger with GP Investments Acquisition Corp, a so-called “blank check” company that was formed in 2015 specifically for the purpose of effecting a merger or acquisition in the United States or Europe. The company had raised $172.5 million to fund such investments.
As part of the merger deal it struck with Rimini, GPIAC issued 63.8 million shares of its stock at $10 per share to Rimini Street shareholders. That was enough for GPIAC shareholders to take a 25 percent stake in Rimini Street (which had a claimed value of $837 million), while giving Rimini the visibility and cachet of being a public company.
As soon as the deal was completed, the combined company immediately changed its Nasdaq stock symbol to RMNI. Under GPIAC, the stock traded for years around the $10 mark. Following the deal, the stock fell to about $7 per share, but since then, it has rebounded to about $8.30 a pop.
Part of the uncertainty surrounding RMNI is its legal troubles with Oracle, which started way back in 2010, when Oracle accused Rimini of stealing intellectual property as part of its third-party ERP software support business. While the trial for the lawsuit was completed in 2015, Rimini has been appealing the ruling of the court, which ordered Rimini to pay Oracle $52.8 million in damages.
Last week, Rimini announced that the United States Court of Appeals for the Ninth Circuit reversed course and will order Oracle to refund Rimini up to $50 million. “The appellate court also overturned all awards and judgments against Rimini Street’s CEO, Seth Ravin,” the company says.
Rimini also stated that it will “continue to prosecute its pending claims against Oracle for, amongst other claims, what Rimini Street believes are illegal anticompetitive practices.” Rimini had countersued Oracle in 2010 following Oracle’s initial suit of IP theft at a “massive scale.”
Rimini sells what is, in effect, “technology insurance.” It saves companies money by providing technical support for various business software products. Instead of paying tech giants like SAP and Oracle for software maintenance, which often amounts to 18 percent to 20 percent of the initial software license fee, companies pay Rimini significantly less and receive what Rimini claims is the same quality of service with its updates. Rimini and other third-party support providers claim they save upwards of 50 percent of the cost of tech support, which can translate to hundreds of thousands of dollars, if not over $1 million, per year.
Late last month, the company issued a slew of updates, including global tax, legal, and regulatory updates for a range of software products, including JD Edwards, PeopleSoft, Oracle E-Business Suite, SAP Business Suite, Siebel CRM, and various other products. Rimini has more than 1,400 clients, including a decent number of IBM i shops who are utilizing Rimini’s support services for JD Edwards World and EnterpriseOne ERP systems, which are still widely used despite Oracle’s efforts to move them from IBM Power Systems to an Intel-based stack.
Last year, the Las Vegas, Nevada-based company announced its new database offering, in which it provides operational break/fix support, diagnostics, troubleshooting, configuration support, and performance tuning tasks for Oracle, SQL Server, Sybase, and the three DB2 databases from IBM, including DB2 for z/OS, DB2 for LUW, and DB2 for i. The company is also providing database security services.
Rimini has talked for years about its desire to be a public company. It actually filed the paperwork for an IPO back in 2013, but it backed out before actually initiating an IPO. Now that it has a Nasdaq listing, the company gets to share detailed financial results with the public. Its first shot at sharing quarterly results came in November, when it reported $53.6 million in revenue, a 32 percent increase from the same period a year ago, and a net loss of $9 million.
As part of the merger with GPIAC, the company received a $50 million equity infusion, which the company plans to use to “expand service offerings and capabilities in new markets and regions, strengthens our balance sheet, and provides the potential to accelerate our growth by facilitating additional sales opportunities,” says Rimini Street CFO Tom Sabol.