24/7 Media Inc. in New York City, the company formed from the merger of three interactive operations, filed a registration statement with the Securities and Exchange Commission for an estimated $40 million, minority-stake initial public offering.
24/7 operates the 24/7 Network of more than 80 Web sites, the ContentZone network of about 2,000 small to medium-sized Web sites, and the CLIQNOW! network of about 75 medium to large Web sites. In addition, 24/7 Media licenses its underlying Adfinity ad-serving technology to independent Web sites.
CLIQNOW! was acquired just last week from K2 Design Inc.
Current shareholders, led by Travelers Group Inc. and Big Flower Holdings Inc., will retain majority voting control of 24/7 after it goes public with an unspecified percentage of the company’s shares–giving new investors a minority stake overall, the filing said.
24/7, headed by Chief Executive Officer David J. Moore, last year lost $19.9 million, plus another $4 million in the first quarter this year, according to Bloomberg News.
“The company anticipates that it will incur operating losses for the foreseeable future due to a high level of planned operating and capital expenditures,” 24/7’s IPO filing said.
24/7 plans to use the proceeds from its planned IPO to fund some of those expenditures, including expansion of sales and marketing as well as other general purposes. Some of the IPO funds could go for acquisitions as well, although no new ones are in the works now, the filing said.
The terms of the public offering have not yet been disclosed and offers will only be made by prospectus. The public offering is being managed by an underwriting group led by Merrill Lynch & Co. J.P. Morgan & Co. and Allen & Company Inc. are co-managers of the offering.
The filing didn’t specify anyone’s percentage stake after the IPO. While no holders expect to sell any shares in the offering, the issuance of new shares will dilute all investors current stakes, Bloomberg said.
24/7 was formed by the merger of Petry Interactive, Interactive Imaginations and the original Katz Millenium Marketing team. It later acquired Intelligent Interactions.