ReachLocal Raising Capital For Company & Holders (RLOC)

ReachLocal, Inc. (NASDAQ: RLOC) is raising a small amount of capital in a possible secondary offering, but the bulk of the shares registered are from selling shareholders.  The filing is for 6 million shares, but that is 5 million from holders and only 1 million from the company itself.

This may be more lock-up expiration shares since the company came public in mid-2010.  While this S-3 filing is for a secondary, it sounds as if these shares from shareholders may be more sold through time rather than just in one large offering.  For the holders it was noted, “The holders of approximately 15,564,795 shares of our common stock are entitled to make a written request that we register their shares on Form S-3 if we are eligible to file a registration statement…”

ReachLocal helps the SMB market, small- and medium-sized businesses, acquire and maintain customers via the Internet with a suite of online marketing and reporting solutions.  The company does search engine marketing, Web presence and social media marketing, display advertising, remarketing, local deals and online marketing analytics.

As far as the use of proceeds from the 1 million shares registered by the company, that was for general corporate purposes, but it also said in the filing, “. We may also use a portion of such net proceeds to acquire, invest in, or obtain rights to, complementary technologies, products, services or businesses.”

ReachLocal’s authorized capital stock consists of 140,000,000 shares of common stock, and it said that as of July 5, 2011, there were 29,190,979 shares of common stock issued and outstanding and 6,431,032 shares of common stock issuable upon exercise of outstanding stock options.

The full S-3 filing is here.

JON C. OGG