Compuware Corp. will wait until sometime next year for the initial public offering of its Covisint Corp. online data exchange unit because of unfavorable market conditions for IPOs, Compuware President Bob Paul told Automotive News in a story noted in AutoBeat Daily.
The company hired investment bank Morgan Stanley last October to explore a $1 billion Covisint IPO. Compuware wants to sell a 20 percent stake to the public and retain 80 percent.
Detroit’s Big Three automakers, along with Nissan and Renault, created Covisint in 2000 as an online purchasing exchange for OEMs and their suppliers. But parts makers were suspicious of Covisint’s usefulness and wary that automakers would use it to extract lower prices. When the exchange failed to meet expectations, Covisint sold its auction business to FreeMarkets Inc. in 2004 and Compuware bought the rest for $7 million.
Covisint now offers Web-based exchange of data and business transactions to the auto industry, government agencies and health care organizations. Annual revenue has nearly quadrupled from 2004 to $40 million.
Paul tells AN the company is in talks with an unnamed automaker to add secure messaging between the company and its dealers to facilitate the exchange of warranty information.
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