OpenTable, which plans to launch its IPO this week, announced that the price range on the offering has gone from $12-$14 to $16-$18. In other words, there's quite a bit of investor interest in the deal. In all, the company plans to issue three million shares (about half of which will be sold by insiders of the company).
OpenTable operates an online network that manages reservations for restaurants. Some of the functions include table management, guest recognition and email marketing.
Founded ten years ago, OpenTable has been able to build a customer base of roughly 10,000 restaurants (processing three million diners per month). Keep in mind that there are 30,000 reservation-taking restaurants in North America.
And, the financials look particularly bright. For the year ended December 31, 2008, revenues increased from $41.1 million to $55.8 million. Although, there was a net loss of $1 million.
A key to the growth has been OpenTable's distribution strategy; that is, the company has a direct sales force that goes door-to-door. True, it can be a slog -- but it is also a barrier to entry.
At the same time, OpenTable is expanding in Germany, Japan, and the U.K. Already, there are about 1,000 restaurant customers in these markets.
The underwriter on the OpenTable IPO is Merrill Lynch & Co. and the proposed ticker symbol is OPEN. Also, you can find the prospectus at the SEC website.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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