GLASTONBURY, Conn. – Open Solutions Inc., an increasingly popular data processing company among large credit unions, has filed with the Securities and Exchange Commission for its Initial Public Offering. The date of the IPO is not yet known. Some 4,800,000 shares of common stock will be offered with the initial price to be between $14 and $16. The company expects to raise $66.1 million in the offering. It will use approximately $4.8 million to pay off debt. Currently OSI owes Liberty FiTech, which it acquired in July of this year, $1.9 million. Approximately $1.7 million of that is due by June 30 of next year. OSI will use funds raised in the IPO to pay off that debt. The acquisition of Liberty FiTEch added $4 million in revenues to OSI for the first three quarters of 2003 ended Sept. 30. Open Solutions will be listed on the Nasdaq under the symbol OPEN. In its filing, OSI states that it had some 1,300 financial clients as of Sept. 30 and its revenues have grown from $12.9 million in 1998 to $44.3 million in 2002. Open Solutions describes its system in the filing as open and customer centric, and as one to replace outdated legacy systems. "We believe that our software reduces the overall cost of a financial institution's information technology and allows our clients to meet their strategic goals more efficiently. Our core software is fully integrated with our complementary products, can run on hardware provided by many vendors and supports third-party products, reducing an institution's development and implementation costs," states OSI. Currently OSI serves credit unions through its Complete Credit Union Solution and banks through its Complete Banking Solution, but it may be branching out to other markets. It states that it plans to target not only larger financials (currently its sweet spot is with mid-sized financials) and international financials, but payroll service companies, and the insurance and brokerage industries. It will also consider strategic acquisitions as a method of growth. OSI's financials are strong so far this year. As of the third quarter ended Sept. 30, 2003 it had recorded a $1.67 million profit, the first time it's shown a profit through three quarters of a year since forming. In 2002 it recorded a loss of $2.8 million; $9.6 million in 2001 and $14.6 million in 2000. OSI expects revenue from reseller agreements to increase, specifically from a deal with BISYS. "BISYS has agreed to pay us aggregate minimum license fees of approximately $27.7 million through June 2006, including $7.2 million in fiscal year 2004. BISYS is obligated to pay us these license fees in quarterly installments," states the filing. The filing also notes a legal issue OSI has been dealing with. Enserv, a small consulting firm, filed a complaint against OSI claiming OSI breached the terms of a value-added reseller agreement. The suit was settled on Oct. 1 of this year with OSI paying Enserv a one-time $233,333 payment and OSI will pay Enserv $133,333 a year for two years for consulting service Enserv will provide the company. OSI has a number of venture capital owners including Menlo Ventures VI with 15.5%, Connecticut Innovations with 8.54%, Key Principal Partners with 6.20%, and Axiom Venture Partners with 8.12%. Other owners include Aetna Life Insurance Company with 7.75%, and HNC Software with 6.04%. OSI's Board will drop from 10 to seven after the IPO. Some of these firms will be represented on the board. [email protected]