Roku, the US-based television streaming box producer backed by media groups including Hearst and News Corp, is set to float in a $219m initial public offering it priced today.
The company will issue almost 9 million shares on the Nasdaq Global Select Market priced at $14.00 each tomorrow, while shareholders will divest almost 6.7 million additional shares.
Founded in 2002, Roku provides customers with a set-top box that allows them to stream television content from a variety of paid TV and online subscription-based offerings.
The company had more than 15 million active accounts as of the end of June this year, and generated approximately $399m in revenue in 2016, making a net loss of $42.8m.
Roku had raised approximately $255m in funding, including $45.5m in a February 2016 round that included media company Viacom, according to Variety.
Broadcaster Sky and News Corp – Sky’s major shareholder – participated in a $45m series E round for Roku in 2012 that included Menlo Ventures, Globespan Capital and an undisclosed additional investor.
Financial services group Fidelity led Roku’s $60m round in 2013, investing together with Sky, News Corp and Hearst. The company’s other backers reportedly include streaming service Netflix.
Entertainment producer and News Corp affiliate Twenty-First Century Fox holds 7% of Roku’s shares but is not divesting stock in the IPO.
Sky Ventures, which functions as Sky’s corporate venturing arm, owns a 3.9% stake in Roku and will sell almost 670,000 shares in the offering, giving it a $9.35m return. Hearst holds a sub-5% share of the company.
Roku’s largest shareholder, Menlo Ventures, owns a 35.3% stake but intends to sell 6 million shares, giving it an immediate $84m return. Its other notable investors include Fidelity (12.9%) and Globespan Capital Partners (6%).
Morgan Stanley and Citigroup Global Markets are lead bookrunners for the IPO, while Allen & Company and RBC Capital Markets are book-running managers. Needham & Company, Oppenheimer & Co and William Blair & Company are the co-managers.
The underwriters will have a 30-day option to buy a further 2.35 million shares, which would increase the size of the offering to approximately $252m.
– Image courtesy of Roku, Inc.