Integral Ad Science Pursues $240 Million IPO

seekingalpha2021-06-30

Summary Integral Ad Science Holding LLC has filed proposed terms for a $240 million U.S. IPO. The firm provides online digital advertising monitoring and verification services to organizations ...

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manekineko
2021-06-30
manekineko
[強]
MamaLee
2021-06-30
MamaLee
Comment
ShawnKoh1
2021-06-30
ShawnKoh1
Like and comment
- MamaLee:
  Ok
Garytan80
2021-06-30
Garytan80
Good
- sharenraj:
  YEss
- 3ddimation:
  Nice
- Ezec:
  Nice
Marcus0168
2021-06-30
Marcus0168
nice
J1000
2021-06-30
J1000
??

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href=https://seekingalpha.com/article/4436493-integral-ad-science-pursues-240-million-ipo><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nIntegral Ad Science Holding LLC has filed proposed terms for a $240 million U.S. IPO.\nThe firm provides online digital advertising monitoring and verification services to organizations ...</p>\n\n<a href=\"https://seekingalpha.com/article/4436493-integral-ad-science-pursues-240-million-ipo\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IAS","symbol_name":"Integral Ad Science Holding","start_time":0,"source_url":"https://seekingalpha.com/article/4436493-integral-ad-science-pursues-240-million-ipo","article_id":"1168582501","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1168582501","pubTimestamp":1625018648,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Summary\n\nIntegral Ad Science Holding LLC has filed proposed terms for a $240 million U.S. IPO.\nThe f","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IAS":"Integral Ad Science Holding"},"translate_title":"Integral Ad Science寻求2.4亿美元IPO","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IAS":0.9},"content_text":"Summary\n\nIntegral Ad Science Holding LLC has filed proposed terms for a $240 million U.S. IPO.\nThe firm provides online digital advertising monitoring and verification services to organizations worldwide.\nIAS is accelerating its growth trajectory, has achieved operating breakeven and the IPO appears reasonably valued, so is worth consideration.\n\nQuick Take\nIntegral Ad Science (IAS) has filed to raise $240 million in an IPO of its common stock, according to an S-1/Aregistration statement.\nThe firm provides digital advertising verification for brands and publishers worldwide.\nIAS looks to be accelerating its growth performance while achieving operating breakeven and the IPO is fairly priced, so is worth a close look.\nCompany & Technology\nNew York, NY-based Integral Ad was founded to develop a cloud-based platform for independent measurement and verification of digital advertising units across various devices.\nManagement is headed by Chief Executive Officer Lisa Utzschneider, who has been with the firm since January 2019 and was previously Chief Revenue Officer and SVP at Yahoo!\nThe company’s primary offerings include:\n\nViewability\nAd Fraud\nBrand Safety & Suitability\nIn Geo\nContextual Targeting\n\nIntegral Ad has received at least $553 million in equity investment from investors including Vista Equity, Atlas Venture Fund and Sapphire Ventures.\nCustomer/User Acquisition\nThe company has 11 offices in 8 countries and seeks medium and large advertisers and agencies through sales and marketing efforts.\nIAS serves 35% of the top 150 U.S. advertisers and the firm had 2,062 total customers as of March 31, 2021.\nSales and Marketing expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate:\n\nThe Sales and Marketing efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of Sales and Marketing spend, doubled in the most recent reporting period, as shown in the table below:\n\nThe firm’s dollar-based net revenue retention rate for its advertiser segment, which is most of its customers, was 110% for Q1 2021 and 132% in 2020, a positive result.\nThe dollar-based net revenue retention rate metric measures how much additional revenue is generated over time from each cohort of customers, so that a figure over 100% means that the company is generating more revenue from the same customer cohort over time, indicating good product/market fit and efficient sales and marketing efforts.\nMarket & Competition\nAccording to a 2021 marketresearch reportby Fortune Business Insights, the global media monitoring tools market was an estimated $2.74 billion in 2020 and is forecast to reach $7.25 billion in 2028.\nThis represents a forecast CAGR of 13.2% from 2021 to 2028.\nThe main drivers for this expected growth are a continued transition of company advertising budget toward digital channels, increasing demand for monitoring and verification capabilities.\nAlso, the COVID-19 pandemic increased demand for online advertising as businesses with a significant offline presence sought to diversify their revenue streams during the pandemic.\nMajor competitive or other industry participants include:\n\nDoubleVerify\nOracle\nHUMAN\n\nFinancial Performance\nIntegral Ad’s recent financial results can be summarized as follows:\n\nGrowing topline revenue at an accelerating rate\nIncreasing gross profit but slightly reduced gross margin\nA swing to operating profit in Q1 2021\nPositive cash flow from operations\n\nBelow are relevant financial results derived from the firm’s registration statement:\nAs of March 31, 2021, Integral Ad had $50.8 million in cash and $413 million in total liabilities.\nFree cash flow during the twelve months ended March 31, 2021, was $29.1 million.\nIPO Details\nIntegral Ad intends to raise $240 million in gross proceeds from an IPO of its common stock, offering 15 million shares at a proposed midpoint price of $16.00 per share.\nNo existing shareholders have indicated an interest to purchase shares at the IPO price.\nAssuming a successful IPO, the company’s enterprise value at IPO would approximate $2.5 billion, excluding the effects of underwriter over-allotment options.\nExcluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 10.07%. A figure under 10% is generally considered a ‘low float’ stock which can be subject to significant price volatility.\nManagement says it will use the net proceeds from the IPO as follows:\n\n The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our shareholders. We expect to use approximately $217.8 million of the net proceeds of this offering (or $251.3 million of the net proceeds of this offering if the underwriters exercise their option to purchase additional shares in full) to repay a portion of the outstanding borrowings under our Term Loan Facility. (Source)\n\nManagement’s presentation of the company roadshow isavailable here.\nListed bookrunners of the IPO are Morgan Stanley, Jefferies, Barclays, Wells Fargo Securities, BMO Capital Markets, Oppenheimer & Co., Evercore ISI, Raymond James, Stifel, Academy Securities, Blaylock Van, Penserra Securities, R. Seelaus & Co. and Siebert Williams Shank.\nValuation Metrics\nBelow is a table of relevant capitalization and valuation figures for the company:\n\nAs a reference, a potential public comparable to Integral Ad would be DoubleVerify (DV); below is a comparison of their primary valuation metrics:\nCommentary\nIntegral Ad is seeking U.S. capital market investment to pay down debt.\nThe firm’s financials show accelerating topline revenue growth, a swing to positive operating profit and continued substantial cash flow from operations.\nFree cash flow for the twelve months ended March 31, 2021, was a respectable $29.1 million.\nSales and Marketing expenses as a percentage of total revenue have dropped as revenue has increased; its Sales and Marketing efficiency rate doubled in the most recent reporting period.\nThe market opportunity for monitoring technologies is expected to grow markedly in the coming years, so the firm has positive industry dynamics in its favor.\nMorgan Stanley is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 27.2% since their IPO. This is a mid-tier performance for all major underwriters during the period.\nThe primary risk to the company’s outlook is the general economics outlook as prospective customers may delay purchases of new capabilities during down economic periods.\nAs for valuation, compared to competitor DoubleVerify which is growing revenue faster, the IPO is more cheaply valued on a revenue multiple basis, but appears reasonably valued.\nIAS looks to be accelerating its growth performance while achieving operating breakeven and the IPO is fairly priced, so is worth a close look.\nExpected IPO Pricing Date: June 29, 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