Classmates IPO Pricing Planned

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Shares in Woodland Hills-based Internet company United Online Inc. gained more than 4 percent Tuesday after the company said it is expecting to price the initial public offering for its popular Web site Classmates.com this week.


Classmates Media Corp., a subsidiary of United Online, is expected to announce the IPO pricing later this week in an effort to capitalize on the surging interest in social networking sites. United Online, which acquired Classmates in 2004, announced in August that it would spin off the popular Web site.


In August, United Online said that Classmates was hoping to raise $125 million in the offering and plans to trade on Nasdaq. Goldman Sachs & Co., Deutsch Bank Securities and JPMorgan were named as underwriters for the offering.


The company did not disclose the percentage of shares United Online will retain after offering, but analysts estimated the company will own about 80 percent of Classmates’ shares which would be worth an estimated $600 million.


Classmates has increased its revenue more than 44 percent to $140 million over the first nine months of this year, making it one of the most profitable Web properties the company controls.


Shares in United Online rose 4.3 percent to $3.07 in early trading Tuesday on the Nasdaq.

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