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Three weeks ago we learned that ruggedised camera maker GoPro was launching an IPO process in New York, after the SEC had approved the preliminary prospectus it had previously filed, confidentially, in February.
At the time it was thought the company, which is led by former surfer Nick Woodman, might try to raise as much as US$100 million and it increase its overall valuation at the same time. The Taiwan tech manufacturer Hon Hai Precision, a.k.a. Foxconn, had already invested in the company in 2012, at a valuation that was placed on the company then of around US$2.25 billion.
Well, additional details of the offering have been crystallising and the company is this week offering 17.8 million shares to the public, at a price of between US$21 and US$24 per share, before underwriting fees and expenses of the offering. If all the shares should be sold at the mid-point price of US$22.50 within this range, this would yield just over US$400 million and give the company a market capitalisation of over US$2.9 billion.
GoPro plans on selling half, or 8.9 million, of the shares in the IPO itself directly from treasury, raising about US$200 million at that price for the coffers of the company, or about twice as much as its current net debt, which it then plans to pay off. Underwriting fees and expenses, net of options exercise revenue, total about US$15 million and thus reducing the net proceeds to the company to about US$185 million.
Of the remaining 8.9 million shares being offered by selling stockholders, the founder, Nicholas Woodman, and his family are offering 3.56 million shares which, again at the mid point in the pricing range, would net them somewhere around US$76 million.
There is also a 15% Underwriter’s over-allotment option to sell another 2.67 million shares at the issue price which, if exercised in whole or in part by the Underwriters, will be sourced solely from selling shareholders and other than Nicholas Woodman and his family.
The company’s wearable HERO line of ruggedised high-res video cams are designed to be used by professional, and keen amateur, sportsmen and women, and by outdoor enthusiasts. These have become ubiquitous and are sold in sorting, photographs and other specialty stores everywhere.
Demand for the offering is expected to be strong after GoPro had an excellent 2013 financial year. In its first quarter financial report for 2014, however, the company recorded an almost 8% fall in revenue, from US$255 million to US$236 million, and a much bigger, 52%, fall in net income from US$23 million to just US$11 million. If the offering is successful GoPro will immediately list on Nasdaq under the symbol GPRO.
Founder Nicholas Woodman, already a paper billionaire, will still control the company after the issue is completed as he and his family hold multiple voting Class B shares.
Looking to the future Woodman is trying to position GoPro as a media creator in addition to being a hardware company, and has brought in former Microsoft executive Tony Bates to serve as the company’s new President. A guy from Qualcomm, Jack Lazar, was also hired to be the Chief Financial Officer in February, as well, to manage the issue and ensure future financial and administrative compliance in the sometimes unwelcome spotlight as a public company.
JP Morgan are lead Underwriters for the offering, aided and abetted by Citigroup and Barclays as co-managers.
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