Bankrate Re-IPO, Price Looks Mostly Fair (RATE)

Bankrate, Inc. (NYSE: RATE) is public again.  The company priced its 20 million share IPO at $15.00 per share.  This was right in the middle of the expected price range of $14 to $16 per share.  If Bankrate sounds familiar, it should.  The online personal finance content maker was taken private by affiliates of Apax Partners in 2009 so this is another re-IPO.

The company itself is offering 12,500,000 of the shares in the offering and the existing shareholders are offering an additional 7,500,000 shares.  For a fully diluted count the prospectus uses 100 million shares, generating a diluted market cap of close to $1.4 to $1.6 billion based upon the offering price.

The company’s personal finance categories cover mortgages, deposits, insurance, credit cards, retirement, auto loans, and taxes. The website also aggregates information about rates from over 4,800 institutions on more than 300 financial products, with coverage of nearly 600 local markets in all 50 U.S. states.  The company boasts some 172,000+ distinct rate tables capturing on average over three million pieces of information daily.  The site claimed over 150 million visits in 2010.  The company’s editorial staff includes 33 editors and reporters, 90 freelancers and 15 expert columnists which generate more than 150 new articles per week on top of over 50,000 stories in its database.

Affiliates of Apax Partners, L.P. own about 90% of the company.  The underwriting syndicate is rather large: Goldman Sachs, BofA Merrill Lynch, Citi, J.P. Morgan, Allen & Company, Credit Suisse, Stephens Inc., RBC Capital Markets, and Stifel Nicolaus Weisel.

After 10 years as a previous public company, Bankrate was acquired on August 25, 2009 by Apax’s Ben Holding.  The company has also executed several acquisitions and two are NetQuote Holdings and CreditCards.com.  As far as how this ties into the Apax value, Apax advises or manages more than $35.0 billion directly or indirectly.  While the acquisitions will throw a wrench in the machine on estimating the carry-cost, it should be known that Apax paid roughly $571 million for Bankrate back in 2009.

Our take: the pricing and terms here look mostly fair as the order book was said to be mostly in-line with expectations.  By not having a super-premium and by not having a large discount, it is easier to evaluate this one.

UPDATE: At 9:59 AM EST we have shares trading at $14.21 and we have an official opening price of $14.00.

JON C. OGG