Hotel Reservations Network (HRN) IPO's on Feb. 25 - More Hot Reservation Portal IPO At The Horizon
If the Holy Family had access to the Internet some two thousand years ago, they may not have had to stay in a stable.
Instead, they might have gone to Hotel Reservations Network (proposed Nasdaq symbol: ROOM). The company was formed in March 1999, after USA Networks USAI bought TMF and HRN Marketing and merged them. It lists rooms in over 1,500 hotels in 40 major markets in North America and Western Europe. Hotel Reservations markets discount hotel rooms (and you've got to like the site name, hoteldiscount.com) over the Internet through its own Web sites, affiliated Web sites, and a toll-free call center.
If a traveler wants to become an investor in Hotel Reservations, they'll get that chance on Friday, February 25, when the IPO starts trading.
Donaldson, Lufkin & Jenrette DLJ, along with comanagers Allen & Company, Bear Stearns BSC, Thomas Weisel Partners, and DLJdirect DIR, expect on Thursday to price 5.4 million shares from $11 to $13 each for trading on Friday's market. After the offering, USA Networks will own about 68.6 percent of the company's outstanding common stock.
The offering is expected to raise about $65 million. The company plans to use the proceeds for working capital, expansion, advertising and other marketing, capital expenditures, and acquisitions.
A REAL COMPANY
The company has negotiated marketing agreements with many of the leading travel-related Web sites, such as Preview Travel PTVL; Expedia EXPE, Microsoft MSFT's travel operation; Travelocity.com, owned by airline reservations giant Sabre TSG; TravelWeb, a property of Pegasus Systems PEGS; Cheap Tickets CTIX; Yupi Internet (proposed Nasdaq symbol: YUPI); GetThere.com GTHR; and over 1,600 other affiliate Web sites.
Francis Gaskins of Gaskins IPO Desktop gives Hotel Reservations Network a B rating. Mr. Gaskins, a veteran Wall Street analyst, evaluates IPOs according to their business models and assigns ratings of A, B, or C for long-term investment purposes. The A ratings are rare, while the C rating is much more common. The B rating is good, and Mr. Gaskins likes this deal. "Hotel Reservations has a good growth rate, is a money maker, and is a real company," he says. And it is an Internet operator.
Hotel Reservations's financials back up Mr. Gaskins's opinion. The company reported pro forma net revenues of $161.8 million for the year ended December 31, 1999, up from $66.5 million in 1998 for its predecessor company. Its revenue has showed a steady increase as well – in 1996 it did $23.3 million. Hotel Reservations did report a net loss of $8.5 million in 1999 versus a net profit of $1.7 million in 1998. But there was a deduction of $34.1 million for amortization of goodwill against the 1999 results.
Mr. Gaskins isn't the only IPO expert who likes this offering. According to 's Street Poll, the deal is Hot, and getting hotter.
Source:
By John E. Fitzgibbon Jr.
, February 24, 2000
www.redherring.com/ipo/2000/0224/ipo-hotel022400.html?id=yahoo
