CarGurus Announces Potential Pricing for IPO

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CarGurus has registered an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company expects to price its 9.4 million shares in the range of $13 to $15 per share, with an overallotment option for an additional 1.41 million shares. At the maximum price, the entire offering is valued up to $162.15 million. The company intends to list its shares on the Nasdaq under the symbol CARG.

The underwriters for the offering are Goldman Sachs, Allen, RBC Capital Markets, JMP Securities, Raymond James and William Blair.

This global, online automotive marketplace connects buyers and sellers of new and used cars. Using proprietary technology, search algorithms and innovative data analytics, management believes it is building the world’s most trusted and transparent automotive marketplace and creating a differentiated automotive search experience for consumers.

The CarGurus marketplace empowers users with unbiased third-party validation on pricing and dealer reputation as well as other information that aids them in finding “Great Deals from Great Dealers.” At the end of June 2017, the firm had an active dealer network of over 40,000, and its selection of over 5.4 million car listings is the largest number of listings available on any of the major U.S. online automotive marketplaces. In addition to the United States, the firm operates online marketplaces in Canada, the United Kingdom and Germany.

In the filing, CarGurus described its finances as follows:

In 2016, we generated revenue of $198.1 million, a 101% increase from $98.6 million of revenue in 2015. Our revenue for the six months ended June 30, 2017 was $143.3 million, a 70% increase from $84.2 million of revenue in the six months ended June 30, 2016. In 2016, we generated net income of $6.5 million and our Adjusted EBITDA was $11.0 million, compared to a net loss of $1.6 million and Adjusted EBITDA of $(0.4) million in 2015. For the six months ended June 30, 2017, we generated net income of $8.6 million and Adjusted EBITDA of $14.1 million, compared to net income of $0.5 million and Adjusted EBITDA of $1.7 million for the six months ended June 30, 2016.

The company intends to use the net proceeds from the offering for general corporate purposes, including working capital, operating expenses and capital expenditures.