With more companies going public in the first quarter of 2014 than in any other year since the dotcom heyday of 2000, IPO candidates are taking advantage of the feeding frenzy.
Today, GrubHub said it is now expecting to sell shares at $23 to $25 apiece in its public debut. Previously, it was targeting a price range between $20 to $22 a share. At the mid-point of the range, the online food ordering service will now raise roughly $169 million to value the company at $1.88 billion.
While the Chicago-based company operates at a national scale, it’s essentially a local company. It partners with mostly independent restaurants to help drive more take-out orders by aggregating the ordering process in one mobile application. For restaurateurs, it’s an opportunity to increase sales without having to add additional capacity in their dining room.
The company has partnered with nearly 28,800 restaurants nationally, of which roughly 500 are in Seattle.
GrubHub will be offering 4 million shares, and shareholders — including major investors, such as Spectrum Equity, Warburg Pincus and Thomas H. Lee Partners, are offering an additional 3 million. GrubHub will only receive the proceeds for the shares it plans to sell, or $87.3 million.
In 2013, GrubHub merged with Seamless to reach national scale to generate a profit of $6.7 million on $137.1 million in revenue. It is through that merger that Brian McAndrews, the former aQuantive CEO and current CEO of Pandora, joined GrubHub’s board as chairman. Lloyd Frink, who is co-founder and Vice Chairman of Zillow, is also on the board.
While IPOs are up, it’s not a slam dunk for everyone.
King Digital Entertainment, the maker of the hit Candy Crush Saga game, sunk nearly 10 percent on its opening day on the New York Stock Exchange.
Fortune also reports that while 72 companies have gone public during the first three months of the year, it is a far cry from the 136 companies that went public between January and March 2000.
