Bloomberg News

HomeAway Seeks Market Value as High as $2.16 Billion in IPO

June 16, 2011

(Updates revenue model in fourth paragraph.)

June 16 (Bloomberg) -- HomeAway Inc., a vacation-rental website, set the price range for its initial public offering at $24 to $27 a share, a market value of as much as $2.16 billion.

The Austin, Texas-based company will offer 8 million shares, and is seeking to raise as much as $216 million, according to a regulatory filing today.

HomeAway is the latest Internet company this year to make about 10 percent of shares available to the public, after online-radio service Pandora Media Inc. and professional- networking website LinkedIn Corp. offered slightly smaller stakes. Surging demand for new Internet companies, combined with a dearth of available shares, can help boost valuations.

Property owners and managers pay annual fees to list vacation rentals on HomeAway.com, which travelers use at no charge. The site gets an average of 9.5 million unique visitors a month, and had 560,000 listings worldwide as of March 31, according to the filing.

HomeAway competes with online travel companies such as Expedia Inc. and Priceline.com Inc., the filing said. While these and other travel websites have traditionally focused on hotel and airfare bookings, some are expanding into vacation rentals, HomeAway said.

Expedia currently trades at about 2.2 times the past year’s sales, while Priceline’s revenue multiple is about 6.9. At the top of the proposed range, HomeAway would be valued at about 12.8 times 2010 sales.

Proceeds

HomeAway may use proceeds from its IPO for unpaid dividends, acquisitions and new product lines. The company said in March it expected to raise as much as $230 million in an IPO.

LinkedIn more than doubled on its first trading day May 19, after selling 7.84 million shares at $45 apiece. The company had raised the proposed range for the share sale on May 17, to $42 to $45, from $32 to $35.

Pandora raised $234.9 million in its IPO, selling 14.7 million shares at $16 each, topping the proposed range of $10 to $12. The stock climbed 8.9 percent yesterday for its debut on the New York Stock Exchange.

--With assistance from Lee Spears in New York. Editors: Lisa Rapaport, Romaine Bostick

To contact the reporter on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net.


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