US-headquartered content discovery software provider Outbrain has gone public in a $160m initial public offering representing an exit for publisher Gruner + Jahr and quantitative trading firm Susquehanna International Group (SIG).
The offering consisted of 8 million shares priced at $20.00 each, below the IPO’s $24 to $26 range. Hedge fund manager The Baupost Group indicated interest in buying 9.9% of the shares in the offering but has not confirmed whether it followed through.
The company floated on the Nasdaq Global Select Market on Friday and its shares closed at $20.07 yesterday, equating to a market capitalisation of approximately $1.08bn.
Outbrain’s software powers online content recommendations and it made a $4.4m net profit in 2020 from $767m in revenue, up from $687m in 2019 when it posted a $20.5m net loss.
Baupost Group invested $200m in Outbrain earlier this month, a deal likely related to its potential share purchase in the IPO. Gruner + Jahr acquired shares in the company through the latter’s acquisition of portfolio company Litagus in early 2019.
Outbrain had raised a total of at least $195m prior to Baupost Group’s investment, $50m coming from SIG’s Susquehanna Growth Equity subsidiary in 2015 and $45m from unnamed investors the following year.
Viola Ventures, Index Ventures, Lightspeed Venture Partners, Gemini Israel Funds, Glenrock Israel, Rhodium and Zohar Gilon are among Outbrain’s earlier investors.
Gruner + Jahr owns a 6.7% stake in the company, diluted from 7.9%. Lightspeed Venture Partners and Viola Ventures each hold 11.8% stakes post-IPO while Gemini Israel Ventures has a 9.2% stake and Index Ventures 4.2%.
Citigroup, Jefferies, Barclays and Evercore ISI are joint bookrunners for the offering while JMP Securities, Needham & Company and Luma Securities are co-managers. They have a 30-day option to purchase up to 1.2 million more shares, potentially lifting the IPO to $184m.
