CNBC "On-Air Stocks" Editor
Waiting for Bankrate to price tonight. The Internet personal finance company (advice on mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes) is seeking to raise 20 million shares at $14-$16.
I hear it is "covered" but not oversubscribed ... that means it will likely price in the $15 range.
I will have the CEO First on CNBC right after the stock opens tomorrow.
Recall that Bankrate was taken private by Apax Partners in 2009 for $570 million...now, less than two years later, they are going public with a valuation of $1.5 billion.
It's not quite that simple. They did acquire Creditcards.com and NetQuote last year for $350 million...two online companies with leading positions in credit cards and insurance. Creditcards.com tried to go public in 2007 but was unsuccessful.
They are floating about 20 percent of the company. One-third of the proceeds go to paying down debt, one third to the company, and the other third goes to Apax. Apax owns over 80 percent of the company, their stake will drop to about 70 percent after the IPO.
What's the growth prospects? This is not a high growth company like LinkedIn or Pandora ... growth will likely come from acquisitions, not organic growth.
The good news: they make money. $285 million in the last twelve months. Two-thirds of their revenues used to come from banner ads and hyperclick links, but that is changing....now two-thirds of the business comes from lead generation. So if someone is looking for an insurance policy, they click on the site, and if it actually turns into a sale for the insurance company BANK gets a commission.
One last point: they are coming to market at time when one of their key peers is down. QuinStreet(QNST), an online advertising company which makes much of its money from auto insurance leads, got hit hard last week when it predicted slower sales. The problem: pricing in this space is getting very competitive.
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