SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY
Lee Spears & Chelsey Dulaney, courtesy Bloomberg —
RetailMeNot Inc. (SALE), a provider of online coupons from more than 60,000 retailers and brands, surged in trading after raising $191 million in a U.S. initial public offering.
The shares rose 33 percent to $27.85 at 2:48 p.m. in New York and climbed as much as 35 percent earlier. Austin, Texas-based RetailMeNot and shareholders yesterday sold 9.1 million shares for $21 each, according to a statement, after offering them for $20 to $22 apiece. The stock is listed on the Nasdaq Stock Market under the symbol SALE.
RetailMeNot completed its IPO as consumer interest in digital coupons is on the rise. The number of U.S. adults using Internet coupons may reach 100 million by 2014, an 8 percent increase from 2012, according to a January eMarketer article. Net income increased more than 10-fold from 2010 to $26 million in 2012, according to regulatory filings.
RetailMeNot’s offering also comes after Groupon Inc. (GRPN) shares have risen 80 percent this year through yesterday. That follows a plunge of as much as 87 percent after its November 2011 IPO, data compiled by Bloomberg show.
Initial interest in RetailMeNot is high because of the company’s focus on offering coupons online for national retailers, versus Groupon’s concentration on local markets, said Tom Forte, an analyst at New York-based Telsey Advisory Group.
“For RetailMeNot, they’re being a traffic driver to large-scale e-commerce sites and helping consumers find coupons for these sites,” he said. “It’s an effective business model — they’re catching you on your way to your shopping choice with coupons.”
The company, which operates RetailMeNot.com in the U.S. and VoucherCodes.co.uk in the U.K., entered the digital coupon industry in 2009 with a string of acquisitions. Backed by investors such as JPMorgan Chase & Co. (JPM), Austin Ventures and Google Inc.’s venture-capital arm Google Ventures, RetailMeNot has focused on growing its coupon base through international investment — picking up sites like Actiepagina.nl in the Netherlands and Deals.com in Germany.
“We are acquisitive and this gives us currency to do some acquisitions,” Chief Executive Officer Cotter Cunningham said today in an interview. “I like the way we built this business through a combination of acquisitions and internal growth.”
The shares sold in RetailMeNot’s IPO account for 18 percent of the company’s outstanding stock, filings show. Morgan Stanley, Goldman Sachs Group Inc. and Credit Suisse Group AG led the offering.
Thank you, TiA