ZoomInfo’s IPO is the Portland area’s biggest ever, valuing company at $13 billion

ZoomIinfo's headquarters, in downtown Vancouver

ZoomInfo's headquarters, in downtown Vancouver.ZoomInfo photo

Vancouver marketing data broker ZoomInfo raised more than $900 million in its initial public offering Thursday, defying the coronavirus outbreak with the region’s biggest IPO ever.

Shares shot up 62% during Thursday’s trading to close at $34, giving ZoomInfo a market value of $13.4 billion. That makes it the second-most valuable company based in the Portland area, trailing only Nike.

It’s an astonishing debut that demonstrates both investor enthusiasm for ZoomInfo’s business and Wall Street’s optimism that the economy will ride out the coronavirus outbreak.

“It’s an exciting day for the region. It’s an exciting day to be a software company in the Portland metro area," said CEO Henry Schuck, 36, who started the company in 2007, when it was called DiscoverOrg.

Thursday’s IPO instantly makes him a billionaire, but Schuck said it also sends a signal about business opportunities in the Portland area.

“It tells everyone outside this region you can build a great and thriving technology company here," Shuck said.

ZoomInfo
Headquarters: Downtown Vancouver.
Business: Collects data on organizations and their personnel, and sells that information to marketers seeking to target their sales pitches.
Founded: 2007, as DiscoverOrg. The company changed its name last year after acquiring rival ZoomInfo, which had been headquartered in Massachusetts.
2019 sales: $293.3 million, more than double its total from the prior year (before the acquisition, which roughly doubled the company’s size.)
2019 losses: $78 million, compared to a $28.6 million loss the prior year. ZoomInfo holds $1.2 billion in long-term debt and interest payments are primarily responsible for its losses.

The coronavirus outbreak prevented ZoomInfo from ringing the opening bell in person, overlooking the trading floor, as newly public companies customarily do. ZoomInfo did it virtually instead Thursday, with corporate images displayed on a giant video billboard above Manhattan and Schuck watching with his wife and daughter from his home in Vancouver.

Although ZoomInfo now ranks near the top among the Portland area’s largest companies, it’s not widely known in the region. That’s partly because it changed its name from DiscoverOrg last year, taking the name of a Massachusetts rival it acquired.

Its business is also somewhat arcane – hoarding data on large organizations and their personnel, then selling that information to marketers who use it to target their sales pitches.

And ZoomInfo isn’t a major employer, with about 1,300 workers across the company. It has 560 employees at its headquarters in an office tower overlooking Interstate 5 in downtown Vancouver, though most are working remotely for now.

ZoomInfo paid Schuck $4.6 million last year but he controls about a fifth of the company’s stock. So Thursday’s IPO gives his shares a value of $2.6 billion.

Henry Schuck, DiscoverOrg

CEO Henry Schuck in ZoomInfo's downtown Vancouver headquarters. The company's IPO made him an instant billionaire. (Oregonian file photo.)

ZoomInfo had sales of nearly $300 million last year, doubling its revenue by virtue of the big acquisition. The Vancouver company lost $78 million, owing primarily to interest payments on $1.2 billion in long-term debt.

Paying down that debt will be one of the major ways ZoomInfo says it will use the millions it raised in Tuesday’s offering.

As one of the region’s biggest companies, Schuck said ZoomInfo will play a bigger role in the community. He said the company offers an unusual professional opportunity for entry-level workers, hiring people from the service sector and putting them to work in its research division and giving them opportunities to rise quickly to senior roles in the business.

“We’re hiring people that used to work out of Papa Murphy’s or they’re in a retail call center," Schuck said. "We’re turning them into sales executives where they have six-figure salaries and can save for their children’s college and buy a house.”

There hadn’t been any major U.S. IPOs during the pandemic, but ZoomInfo’s big debut Thursday followed a big public offering from Warner Music on Wednesday that valued that company at nearly $13 billion.

Thursday’s IPO made ZoomInfo more valuable to investors than Flir Systems and Columbia Sportswear (the region’s third- and fourth-largest companies, respectively) combined.

While the coronavirus is certainly depressing the economy, Schuck said it’s also created opportunities for ZoomInfo to reach marketers who used to make their sales pitches in-person.

“We are helping companies digitize the way they go to market," he said.

ZoomInfo priced its shares at $21 apiece in Thursday’s IPO and shares promptly jumped by $13. New stock offerings frequently enjoy a big pop when they first hit the market, but Thursday’s huge boost defies the economic downdrafts created by the coronavirus pandemic.

Wall Street has recovered most of the value stocks lost in the early days of the pandemic, when stocks fell by roughly 30%. But the coronavirus is taking a severe toll on the broader economy, which ZoomInfo acknowledged in its IPO filing.

The Vancouver company said it has laid off 100 employees this spring due to the economic impacts of the coronavirus, and the company said it expects “slowed growth or decline in new customer demand” due to the pandemic.

The economy in the Portland area had been thriving before the pandemic hit, with jobless rates near an all-time low, but the region rarely spawns large, new companies. Oregon and Southwest Washington’s labor markets are increasingly dependent on regional outposts of large out-of-state companies.

In the Portland area, ZoomInfo’s IPO is just the second of any size in nearly 16 years – the other was laser manufacturer nLight, which went public in 2018.

And while the region has grown few large companies in recent decades, many prominent businesses -- Mentor Graphics, FEI Co. and Standard Insurance, among them -- have sold to larger corporations.

Others, like Flir, have moved their headquarters out of the region to be closer to corporate hubs in other parts of the country.

On Thursday, Schuck said ZoomInfo isn’t going anywhere.

“We like the community. I live here," he said. "I don’t plan on moving.”

Update: This story has been updated with ZoomInfo’s closing share price, which changes the value of the company and of the CEO’s stock.

-- Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699

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