We’re not going to write about every IPO, although for a while, it wouldn’t have been too difficult to keep up.
But yesterday, a company near and dear to our nerdy little hearts filed, so we figured we’d write it up.
The issuer is Newegg, the online electronics retailer.
The details of the offering, including the lawyers and other players, after the jump.
This is no dotcom bubble offering. Newegg had $21 million in net income on $2.2 billion of revenue last year, and is ahead of that pace this year, with just under $12 million in net revenue on $1.1 million revenue.
Despite the lofty numbers, the company is only raising $175 million, which it will use for, among other things, international expansion.
It’s always good to have friends on the inside. The company’s GC is Lee Cheng (base salary of $221,010, “total” comp of $369,897 for 2008, for what it’s worth), who has been there since 2005.
Prior to Newegg, Mr. Cheng worked as an attorney at the law firm of Latham & Watkins LLP. Mr. Cheng has also served as the Vice President and General Counsel of GeneFluidics, Inc., a medical diagnostics company, and as the Vice President of Administration and Legal Affairs at LightCross, Inc., an optical networking components company. He entered private practice at the law firm of Dow, Lohnes & Albertson and also worked as an Associate with the law firm of Gray, Cary, Ware & Freidenrich (now DLA Piper). Mr. Cheng is a member of the State Bar of California. Mr. Cheng holds a Juris Doctor from U.C. Berkeley, Boalt Hall School of Law and a Bachelors degree, magna cum laude, in History and Science from Harvard University.
It’s not at all like they’re unqualified, but having the GC as a former associate always helps with the client development. Not surprisingly, Latham & Watkins got the issuer’s work. Julian Kleindorfer (Yale BA ‘90, JD ‘94) led the team. Davis Polk’s Alan Denenberg (McGill BA ‘82, Osgoode LLB ‘85, Columbia LLM ‘87) led the underwriter’s counsel.
Insight Venture Partners invested $20 million for 12.7% back in June, 2005. The fund’s advisors include Robert Rubin (Chairman of Citigroup) and Steve Friedman (former Chairman of Goldman Sachs).
So guess who the underwriters are…
The offering is being led by JP Morgan, BofA Merrill Lynch (the first time we’ve seen them use that appellation), and Citi. No Goldman.
The company has great brand loyalty (of which, we’re a fine example), which has allowed it to keep its marketing and customer-acquisition costs extremely low. Their motto is “Once you know, you Newegg,” and it’s true. Customers are fiercely loyal and zealously recommend it to others.
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Disappointed that Newegg has never been recommended to me before, but I look forward to checking them out!
Also nice to see an IPO for a Company that actually… makes money?
Oh, and many changes on the underwriter / bookrunner front these days. I saw a $400 million debt offering today with 8 (!!!) bookrunners, some of whom I don't think I've seen on a deal before.