This has been hinted at or said all-but-explicitly many times in the past. According to Dow Jones Newswires:
ReachLocal Inc . . . plans to sell up to an estimated $100 million of stock in an initial public offering . . .
The company said it would use a small amount of the proceeds for a deferred payment on its purchase of the stake in its Australian operations it didn’t already own. The rest will go to general corporate purposes and working capital.
ReachLocal, founded in 2003, saw revenue more than doubled last year. In the first nine months of 2009, it was up 38% to $143.3 million while it swung to an $11.7 million profit.
(Here’s the SEC filing, with lots of info about the company, its finances, executive compensation and its revenues.)
According to the company’s Inc 500 profile:
The nearly $147 million in 2008 revenue put ReachLocal’s growth from 2005 at 3,217 percent. Of the companies on Inc. 500 that were founded in 2004, ReachLocal had the third highest revenue. ReachLocal has experienced over 146,000 percent revenue growth since its 2004 founding year.
A little over a year ago when the company opened its UK office it said it “serves 12,000 local businesses in over 30 markets around the world, including the UK, US, Canada and Australia.”
Reach has consistently said to me that its churn is “much lower” than the 65%+ annualized churn experienced by most of the local SEM channels selling online marketing to SMBs. If we assume that there are 15,000 advertisers/accounts that Reach is managing (my guess), that would mean the annual value of each, on average, is just under $10K.
Anyone want to add anything to this or express their opinion about the prospects for a public ReachLocal?
From the press release about the forthcoming IPO:
ReachLocal, Inc., a local online marketing company, announced today that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) relating to a proposed initial public offering of shares of its common stock. The shares of common stock to be sold in this offering are proposed to be sold by ReachLocal and certain stockholders. The number of shares to be offered and the price range for the offering have not yet been determined.
J.P. Morgan Securities Inc. and BofA Merrill Lynch are acting as joint book-running managers. Citi is acting as lead manager, and Piper Jaffray & Co., Needham & Company, LLC and Broadpoint.Gleacher are acting as co-managers.