Wanna get a head start as far as due diligence for the next crop of hot IPOs? Look no further than the new issue mavens at Renaissance Capital…
2011 is shaping up to be an active year for US-based Internet and new media IPOs. Recent IPO filers include real estate information marketplace Zillow (ZLOW), leading online professional network LinkedIn (LNKD), online vacation rental marketplace HomeAway (AWAY) and Internet radio provider Pandora Media (P). Many more high-profile US Internet companies are anticipated to file for an IPO in the coming months.
The LinkedIn deal will prove to be one of the more watched issues because it is the first pure-play “social media” deal; its reception will mean a lot to the startups that want to come afterwards. Here’s the Renaissance first look:
LinkedIn, the leading professional social networking website with more than 90 million members worldwide, filed in January with the SEC to raise up to $175 million in an initial public offering. A quick glimpse of the numbers suggests that the company could easily be in the $2-$3 billion range (if not higher) given an annualized revenue-run rate of $250 million, top-line growth of 100% and current EBITDA margins of 18-20%. The company has been cash flow positive for at least three years with annualized cash flow from operations close to $50 million. While the company has been deploying much of that cash back into the business in the form of capital expenditures to support its platform growth, the business model appears highly scalable and should generate meaningful amounts of free cash flow as the business scales.
The Mountain View, CA-based company, which was founded in 2003, booked $201 million in sales for the 12 months ended September 30, 2010. Morgan Stanley, BofA Merrill Lynch and J.P. Morgan are the lead underwriters on the deal.
Aside from being an authority on IPOs, RenCap is one of the notable research firms that gets social media and is smart enough to have begun tweeting their links through StockTwits. These other research shops are still hashtagging for some bizarre reason.
Anyway, head over below for the skinny on these upcoming new issues.