Tuesday, November 3, 2009

Ancestry.com Goes Public This Week

Ancestry.com logo Plans seem to be proceeding for Ancestry.com to go public this week. Renaissance Capital has selected Ancestry.com as its featured IPO for the week. You can read more here and here.

Yesterday Ancestry.com filed a Form 8-A which I assume officially registered their stock for sale on the Nasdaq stock exchange. They also filed an amended S-1 statement reflecting a reverse 1-for-2 stock split that took place last Friday.

This is a common step taken just before an IPO when the value of each share is too low to fall within the desired price range. Ancestry.com is targeting a price between $12.50 and $14.50 a share. So, for example, if shares were valued at $7 each, a reverse 1-for-2 stock split would take two shares valued at $7 apiece and exchange them for one share valued at $14.

Ancestry.com is expected to price its stock tomorrow. On the following day it will begin trading on the Nasdaq using the symbol ACOM. (See coverage at Reuters ACOM.O.)

The offering consists of over 4 million shares of common stock offered by the company and under 3.4 million shares offered by current shareholders, making a total of about 7.4 million shares. This will bring the total number of common stock shares in the company to nearly 42.5 million. The company does not have any preferred shares, so Ancestry.com must expect a company valuation of about 658 million dollars on 217 million in revenues and 11 million in net income.

About $12.1 million of the money raised is earmarked to repay CIT, which declared bankruptcy on Sunday. The repayment from Ancestry.com is a drop in the bucket for CIT. With 71 billion dollars of assets, it is the fifth largest bankruptcy in US history. The 2.3 billion dollars invested in CIT Group by taxpayers last December is expected to be totally lost.

To see Ancestry.com’s amended S-1 filed yesterday, click here. To see their Form 8-A, Registration of Securities, click here.

1 comment:

  1. I'm a bit confused... why is Ancestry paying CIT $12.1 million?

    ReplyDelete