EyeBlaster’s Second Shot at IPO: Will it Work This Time?

Taking a company through an initial public offering (IPO) is not an easy task. It requires months of preparation from management and a tiring roadshow process, in order to convince potential investors on the viability of the company and its plans for growth. It’s also an uncertain exit for the entrepreneurs, as they are typically restricted to sell any of their stock in the first 180 days following the IPO, and even then they can sell no more than 1% of stock a month. If the IPO goes well and management keeps bringing value, it works great for everyone. If the stock falls during those months, all that blood, sweat and tears can equate to a little more than a salary for the management team.

Eyeblaster, an Israeli company headquartered in New York, develops several media-rich advertising formats (see examples here and here) and interactive ad features, as well as MediaMind, campaign management software for agencies and online advertisers.  Eyeblaster pulled out of its initial IPO filing in October 2008 citing the “market conditions” as a reason for the delay. Today, Eyeblaster notified the SEC of its intention to go public as detailed in the company’s S-1 Filing. Eyeblaster is trying to raise $115 million by selling stock. This is the exact amount it was trying to raise two years ago, in the initial IPO.

Joseph Tartakoff @Paidcontent posted a good analysis of the filing:

—Financial performance: The recession appears to have taken a big hit on Eyeblaster’s growth. Revenue inched up only two percent to $65.1 million in 2009. By contrast, sales had jumped 43 percent the year before.  Net income did however increase to $9.8 million last year, from $6.2 million, in part due to cost-cutting (Eyeblaster says it “focused on cutting costs given the uncertain global economic environment” during the first half of 2009). The company has $15.4 million in cash and cash equivalents.

—Ownership: Eyeblaster had raised about $40 million in funding, including $30 million in a round three years ago. Its main shareholder is Sycamore Technologies Ventures, which owns 33.9 percent of the company. Other big stockholders include Insight Ventures (22.6 percent), CEO Gal Trifon (8.1 percent) and co-founder Osfer Zadikario (6.2 percent).

—Use of funds: The company says it will use the cash for general corporate purposes, as well as possibly to “acquire or invest in companies and technologies”—although it says it has no immediate plans to do so.

—Stock: Underwriters include JP Morgan Securities, Deutsche Bank Securities, Pacific Crest Securities, FBR Capital Markets, ThinkEquity, and Broadpoint Capital.

This would be the seventh digital firm to go public in 2010 including Israel’s Vringo (see SEC filing) as well as GameFly, Everyday Health, Motricity, Lulu, and Reply.com. Can Eyeblaster pull it off this time?