Applied Predictive Technologies this month hired a new chief financial officer with deep experience in taking private companies public, a sign that the closely-watched Ballston-based data analytics company may be preparing its own initial public offering.
Jeff Babka, 60, who started last week, was chief financial officer of NeuStar when that company filed a $700 million public offering in 2005. He also was CFO at global IT security firm Sophos, which was preparing for an offering before it was purchased by Apax Partners in 2010.
A colorful firm known for hiring math geniuses, APT has been the subject of intense speculation in local technology circles since last June, when Goldman Sachs invested $100 million in the firm. Many in the local investment technology and financial communities speculated that Goldman Sachs would eventually want to take the company public or sell it.
“At some point in time when you are a private equity-owned company there is going to be a liquidity event,” Babka said. “Perhaps it will be an IPO, perhaps a sale.”
Several banks have been in contact with APT, hoping to win the initial public offering business should the company take that route, said one source familiar with the discussions who was not authorized to speak publicly.
APT chief executive Anthony Bruce would not comment on whether the company is planning an IPO. In an e-mail, he called Babka’s IPO and acquisition experience “a big plus.”
“Jeff’s private company financial management achievements and public company financial management accomplishments are terrific experiences he will bring to APT,” Bruce wrote in the e-mail.
Babka—who leads IPO seminars for Ernst & Young—said his immediate goal is to continue to expand the company.
APT’s computer software crunches large amounts of data to help Subway, Wells Fargo, Anheuser-Busch InBev, Walgreens, Wal-Mart and other clients understand how best to price, sell and market their products.
APT is known among colleges and universities for its aggressive recruitment of high-performing technology students at top schools. Recruits often receive signing bonuses and six-figure salaries. Some graduating seniors even get chocolate, food or fruit packages from their future employer during final exams senior year.
The firm was founded in 1999 by chairman Jim Manzi, who attended the Massachusetts Institute of Technology and once worked for Bell Labs, chief executive Bruce, formerly of Morgan Stanley and McKinsey, and managing director Scott Setrakian, formerly of Strategic Planning Associates.
All three stand to reap big paydays when the company goes public.
Silicon Valley venture capital firm Accel-KKR invested $54 million in APT in 2006, buying a majority stake that valued the firm at about $100 million. APT has increased its revenue significantly since then, and the new value is likely to be several times that amount.
APT has offices in Ballston, San Francisco, London, Tokyo and Taipai. Its clients include Walmart, Staples, Lowe’s, SunTrust, Hilton Hotels, Anheuser-Busch InBev and McDonald’s.
Immediately prior to joining APT, Babka worked at Vibrant Media, an in-text advertising technology company, where as chief financial officer he led the acquisition of ImageSpaceMedia in 2012.
“CEOs and CFOs with IPO experience are a sought after commodity in our region. They are good and they are expensive. You don’t hire one unless you plan to take your company public,” said John Backus, managing partner with New Atlantic Ventures, a Reston and Cambridge, Mass. early-stage investment firm.