IPOs this week : March 2 - 6, 20 (wk 10)

IPOs expected to price

• GFL Environment (GFL) is expected to price its $1.77B IPO on March 3. 

IPO quiet period expirations

• The analyst quiet period expires on Casper Sleep (NYSE:CSPR) on March 2. Shares of Casper closed at $9.02 on Friday vs. the IPO pricing level of $12. Will analysts boost the online bedding stock with bullish reports? 
• Schrodinger (NASDAQ:SDGR) and PPD (NASDAQ:PPD) on March 2 
• OneWater Marine (NASDAQ:ONEW), Nexpoint Real Estate (NYSE:NREF) and Professional Holding (NASDAQ:PFHD) on March 3. 

Also, watch for news on DoorDash (DASH) after the company disclosed that it filed confidentially for an IPO. The DoorDash IPO could be of interest to Uber Eats (NYSE:UBER), Postmates (POSTM) and GrubHub (NYSE:GRUB).

GrubHub (GRUB) reported earnings on Thur 8 Feb 2018 (b/o)

• Feb. 7 (Wed):  #44; vol. 2.6M  -->  +32%

** charts before earnings **

 

** charts after earnings ** 

 

GrubHub beats by $0.06, beats on revs; guides Q1 and FY18 in-line 

• Reports Q4 (Dec) earnings of $0.37 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.31; revenues rose 49.2% year/year to $205.1 mln vs the $201.55 mln Capital IQ Consensus. EBITDA +45% to $57 mln vs. $51-56 mln guidance.
• Active Diners were 14.5 million, a 77% year-over-year increase from 8.2 million Active Diners in the fourth quarter of 2016. Daily Average Grubs (DAGs) were 392,500, a 34% year-over-year increase from 292,500 DAGs in the fourth quarter of 2016. Gross Food Sales were $1.1 billion, a 39% year-over-year increase from $818 million in the fourth quarter of 2016. 
• Co issues in-line guidancefor Q1, sees Q1 revs of $224-232 mln vs. $227.14 mln Capital IQ Consensus; EBITDA $54-60 mln.
• Co issues in-line guidancefor FY18, sees FY18 revs of $910-960 mln vs. $938.33 mln Capital IQ Consensus; EBITDA $225-255 mln.
• "The partnership with Yum! which we announced this morning will accelerate the expansion of our delivery network and amplify our diner acquisition efforts, raising consumer awareness of online ordering and driving more volume for all restaurants across our platform."

GrubHub (GRUB) reports earnings tomorrow (Feb 5) before open

AFTER earnings

GrubHub (GRUB) : 9-month performance

** weekly **

** daily **

GrubHub (GRUB) : insiders cashing out

Most of the 10 million shares being offered are coming from insiders, particularly private-equity funds that backed Seamless, the New York-based food-ordering service that merged with GrubHub a year ago.

Insiders are selling 8.8 million shares. Chicago-based GrubHub itself is selling 1.25 million shares worth about $50 million. GrubHub's stock fell nearly 10 percent to about $39 on the announcement of a secondary offering.

The stock had been riding a wave of optimism since GrubHub's strong second-quarter earnings report July 23, rising 28 percent to more than $40 a share.

STRONG IPO PERFORMANCE

GrubHub, an online platform for restaurant takeout, has had one of Chicago's strongest IPO performances. It went public April 4 at $26 per share and climbed to $43.29 the first day. Like Deerfield-based Textura Corp., which makes construction software, GrubHub took advantage of the strong showing to quickly do a secondary offering.

The biggest sellers of GrubHub's stock are Warburg Pincus Private Equity and Spectrum Equity, each selling 1.9 million shares worth about $77 million. That works out to one-fourth of Spectrum's holdings and one-third of Warburg's stake.

Lightspeed Venture Partners, an early backer of GrubHub, is selling 1.2 million shares, or 43 percent of its shares. Goldman Sachs is selling 21 percent of its stock, or 1.3 million shares. Chicago-based Origin Ventures, GrubHub's first venture backer, is selling 609,802 shares, or 15 percent of its holdings.

Jonathan Zabusky, GrubHub's president and former CEO of Seamless, is selling 298,801, or 39 percent of his holdings. GrubHub CEO Matt Maloney is selling 183,089, or 9 percent of his stake. Mike Evans, former chief operating officer, isn't selling any of his 2.1 million shares.

These shareholders may sell more if underwriters exercise an overallotment provision.

GrubHub (GRUB) : 4-month performance

GrubHub (GRUB) : 2-month performance

GrubHub (GRUB) began trading on the NYSE on 4 April 2014

• GrubHub shares up 31% on 1st day of trading

  

CEO Matthew Maloney of GrubHub rings the opening bell at The New York Stock Exchange on April 4, 2014 in New York City

People dressed in food-themed costumes walk on the floor of the New York Stock Exchange to celebrate the IPO of GrubHub.

GrubHub co-founders Mike Evans, left, and Matt Maloney, right, pictured inside the company's headquarters.

GrubHub's debut is among the best of recent Chicago-area tech IPOs. Arlington Heights-based Paylocity Holding Corp., which went public March 13, enjoyed a 41 percent jump on the first day. Textura Corp., based in Deerfield, had a 39 percent opening-day bounce when it went public in June.

CEO Matt Maloney, who founded the company a decade ago with Mike Evans, led the coast-to-coast road show over the past two weeks. Investors quickly warmed to GrubHub's story and the company's potential to disrupt a large old industry.

As an e-commerce company, GrubHub often has been overshadowed by Groupon Inc. Although they are two of the highest-profile companies in the recent emergence of Chicago's startup tech scene, they took very different paths.

Andrew Mason, who was a coder at Chicago e-commerce company InnerWorkings, dropped out of grad school at University of Chicago to start Groupon with InnerWorkings founder Eric Lefkofsky. The daily-deal idea exploded, and Groupon briefly became one of the nation's hottest tech companies before stumbling. Though it topped $1 billion in revenue, Groupon wasn't profitable when it went public in 2011 and still isn't. Today, Groupon's market value is about $5.3 billion, less than what Google Inc. offered to buy the company nearly four years ago.

Messrs. Evans and Maloney were coders at Apartments.com. After launching the company, Mr. Maloney went back to University of Chicago to get an MBA. They built the company slowly and ended up merging with rival Seamless before attempting an IPO. While the combined company had $170 million in revenue last year, it had a profit of $4.2 million. GrubHub has been profitable for three years, according to its prospectus.

GrubHub Inc.'s IPO promises to be a nice payday for insiders.

4/3/14 update :

• GrubHub Inc. is going public at $26 per share, above the target of $23 to $25 per share set earlier this week, according to a securities filing.
• At $26 per share, the Chicago-based company will have a total market value of $2.1 billion and will raise about $104 million.
• GrubHub is set to start trading on Friday, April 4, 2014 on the New York Stock Exchange under the symbol "GRUB".

The online food-ordering business said this morning it expects to offer 7 million shares at $20 to $22 a share — but GrubHub itself is only selling 4 million shares, raising about $76 million and giving the company an overall market value of $1.7 billion.

Matt Maloney, chief executive officer and co-founder of GrubHub.

The rest are being offered by insiders, including CEO Matt Maloney, who plans to sell 475,200 shares. Assuming GrubHub gets $21 per share — and it may well get more if the IPO market remains hot — that's nearly $10 million for the 38-year-old founder.

It's about 19 percent of his holdings, and he'll still have 2.1 million shares, or 2.7 percent of the stock after the IPO, according to the prospectus. So it's not as if he's cashing out completely.

The insider sales could be a reflection of GrubHub's small float, or the amount of a company's stock available for trading on the open market. The company is selling just 5 percent of its stock to the public, which could create short-selling headaches later, as Groupon saw when it sold just 6 percent of its shares in its IPO. Including the insider sales, GrubHub will have a float of about 9 percent.

But it's a potential red flag to investors when insiders want to sell at the same time they're asking the public to buy — but before it's clear retail investors will make money. It's also a reflection that GrubHub and its partner, Seamless, have accumulated a lot of mouths to feed in their long route to an IPO, and those investors have waited a long time for a payday. GrubHub is a 10-year-old company; Seamless, which already has been bought and sold once, was founded in 1999.

“They must feel pretty confident the IPO is going to do well,” said Tim Loughran, a finance professor at University of Notre Dame, who studies IPOs. “The fact that the market is letting them do it, is an indication that the IPO is going to be successful and have a nice first-day pop.”

The company declined to comment.

The biggest selling shareholder in GrubHub's IPO is Spectrum Equity Associates, which is selling 669,745 shares, worth about $14.1 million. Spectrum was an investor in Seamless, the food-delivery company that GrubHub merged with last year to bulk up enough to go public.

Boston-based Spectrum still will be the largest investor in GrubHub after the IPO and its sale — with about 10.6 percent of the stock.

Other sellers include GrubHub's early Chicago backers, Origin Ventures and Leo Capital Holdings. Chicago-based Origin plans to sell 229,225 of its 4.6 million shares, a slice worth about $4.8 million, but will retain a 5.6 percent stake in GrubHub. Northbrook-based Leo Capital plans to sell 248,798 shares of its 2.7 million shares, a cut worth about $5.2 million. Other sellers include Warburg Pincus, funds affiliated with Goldman Sachs and Thomas H. Lee Partners, which are selling 5 percent of their respective holdings.

GrubHub files for $100M IPO

The Chicago-based online food-ordering service, which merged last year with New York-based Seamless Inc., has been profitable for three years.

GrubHub CEO Matt Maloney

According to the filing, it had $137 million in revenue last year and net income of $6.7 million. Excluding interest, taxes, depreciation and amortization, GrubHub's operating profit was $38.1 million.

Revenue grew 66 percent last year following the merger, after climbing 36 percent in 2012, according to the filing.

The company’s customer base exploded after the merger with Seamless, whose business is much more focused on corporate food-delivery in New York and other markets. The number of diners more than tripled last year to 3.4 million.

The 10-year-old company lined up A-list bankers to lead the deal, including Citigroup, Morgan Stanley and Allen & Co. Chicago-based Wm. Blair & Co. also is an underwriter.

Last week the Wall Street Journal reported that GrubHub had made a confidential filing for an initial public offering.

GrubHub Seamless Inc. files confidentially for IPO

• The combined company processes about 150,000 customer orders on a daily basis.
• It generated over $100 million in sales last year. 
• It takes a cut, sometimes as high as 15-17%, of each order made through its online restaurant menu directory.

GrubHub Seamless Inc., the online restaurant menu and takeout-ordering service, has made a confidential filing for an initial public offering, according to people familiar with the matter.

Company officials have met with investment banks and could launch the IPO in the first half of the year, one of the people said. It is unclear how much the sale would raise or value the company at.

A spokeswoman for GrubHub Seamless declined to comment.

The company was formed by the merger of New York-based Seamless and Chicago-based GrubHub last year. Seamless had previously been planning on going public on its own.

Seamless was launched in 1999, then acquired by food-service company Aramark (ARMK) in 2006. Spectrum Equity Investors, a private-equity firm, bought a minority stake in Seamless in 2011 for $50 million. The rest of the company was spun out to Aramark's own private-equity owners as a dividend in 2012. Those firms included Warburg Pincus LLC, Thomas H. Lee Partners LP, CCMP Capital Advisors LLC and GS Capital Partners, a unit of Goldman Sachs Group Inc.

GrubHub was founded in 2004, and had raised nearly $85 million in venture capital funding from firms including Benchmark Capital, DAG Ventures and Origin Ventures.

The two companies announced their merger last May, then in August said that T. Rowe Price Group Inc. (TROW) bought a stake in the combined firm. T. Rowe's New Horizons Fund owned 1.4 million shares, worth $12 million, as of Dec. 31, according to a fund prospectus.

The two companies have absorbed a number of other online-menu providers. In 2011, Seamless acquired MenuPages and GrubHub acquired Dotmenu, owner of websites CampusFood.com and Allmenus.com.

GrubHub Seamless has 28,000 restaurants across 600 cities that post menus or allow customers to order through the company's websites, and generated $100 million-plus in revenue in 2012.

Under U.S. securities rules, companies with less than $1 billion in revenues in the past fiscal year can initially file secretly with regulators for a public offering.

Online food delivery company GrubHub prepares for IPO

(Reuters) - Online food delivery company GrubHub has hired banks for an initial public offering next year, according to three people familiar with the matter.

• http://www.grubhub.com/

Chicago-based GrubHub, which competes with larger rival SeamlessWeb to allow consumers to order food via the Internet or mobile phones, has selected Citigroup (C.N) to lead the IPO, two of the people said.

The company is in the process of filling out the rest of its underwriting syndicate, said the people, who requested anonymity because the IPO plans are not public.

Founded in 2004, GrubHub is backed by venture capital investors including Benchmark Capital, DAG Ventures and Lightspeed Venture Partners.

The company's revenue is about half that of SeamlessWeb, which posted roughly $60 million in sales last year, one of the people said. This pegs GrubHub's 2011 revenue at around $30 million.

GrubHub, which has more than 250 employees, has raised more than $84 million in venture funding, including $50 million in September 2011.

Last year, GrubHub acquired New York-based Dotmenu, which ran Campusfood and Allmenus.

GrubHub declined to comment. Citigroup did not immediately respond to requests for comment.