78.4 F
San Diego
Saturday, Sep 24, 2022
-Advertisement-

The Active Network Takes Action Toward Raising $150M in IPO

THE ACTIVE NETWORK

CEO: Dave Alberga.

Revenue: $218 million for the first nine months of 2010; about $180 million for the same period in 2009.

No. of local employees: 459.

- Advertisement -

Investors: ESPN, Canaan Partners, IAC and ABS Ventures.

Headquarters: Sorrento Valley.

Year founded: 1998.

Company description: Provides registration services to endurance athletes in such events as marathons and triathlons, as well as related services. It also operates similar sites for outdoor enthusiasts, including a camping reservation site and a site for hunting licenses.

San Diego-based The Active Network, which provides registration services for athletic endurance events, is planning to sell a ton of public stock in the near future.

The home-grown Web-based company said Feb. 14 in a filing with the Securities and Exchange Commission that it hopes to raise $150 million in its offering, and use part of the money to repay debt, which amounts to $43 million.

In addition, the company said some of the proceeds would go toward “funding potential acquisitions and for general corporate purposes, including financing our growth, developing additional application services functionality and features, acquiring new customers and funding capital expenditures.”

Because the company is in a quiet period as required by regulators, spokesman Jake Gonzales said he couldn’t talk about the company or the stock offering.

“I can’t comment right now,” he said.

Nik Varaiya, a professor of finance at San Diego State University’s business school and an expert in initial public offerings, said it appears that Active Network is taking advantage of the growing appetite for new companies on Wall Street among investors, both institutional and retail. 

“They would like to take advantage of the current market for new shares while the window of opportunity is still open,” he said.

Encouraging Signs of Growth

He added the fact that the company has been steadily growing sales, though it has never made a profit, is encouraging.

“That says a lot about their ability to grow significant revenues over time,” he said. And he noted that the company has been narrowing losses, too.

But, he also said that current investors are probably putting some pressure on to go public so they can cash out of their position. 

“The challenge will be to continue that sales growth” and become profitable, he said.

The Active Network works with about 47,000 businesses and organizations, and registers 70 million visitors to its Web sites each year, according to the company.

In its SEC documents, the company reported sales of $218 million for the first three quarters of its fiscal year, an 18 percent increase from the year ago period. It reported a net loss of $38 million for 2010, down from $49 million the year prior.

The Active Network ranked No. 8 on the San Diego Business Journal’s list of the Largest Private Companies with $245 million in revenue for 2009.

The privately held business is 13 years old, and has a high profile with the athletes using its site to sign up for such events as triathlons and marathons, as well as other outdoor activities.

Words of Caution

However, it has $328 million in accumulated deficits, according to the SEC filing. It said the business area is still evolving, and poses some risks to investors:

“We … have a limited operating history with our current business upon which to predict our future operating results,” the filing said. “The business is relatively new and subject to rapid change.” 

The company has raised more than $275 million in a number of rounds from venture capital investors, including $22 million from ESPN, the sports media giant. The company owns 22 percent of The Active Network, according to the SEC filing.

VC firms with investments include Menlo Park-based Canaan Partners, New York City-based IAC (which took stock in exchange for ReserveAmerica campground reservation site) and Boston-based ABS Ventures.

Entering Faith Market

Meanwhile, it appears that Active Network is getting a little religion.

The company said Feb. 8 that it has acquired Fellowship Technologies, which provides church management software to its customers.

The software company counts 1,700 churches as clients, including 36 percent of North America’s largest churches, according to an Active Network news release.

A company news release said the market for such software is huge.

There are 300,000 churches in North America, not to mention the tens of thousands of houses of prayer overseas.

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-