SEATTLE – The Cobalt Group Inc., a provider of Internet marketing and data aggregation services to the automobile industry, went public August 5, offering 4.5 million shares at $11 apiece. The company’s stock priced below its $13 to $15 filing range.
Underwritten by BancBoston Robertson Stephens, Bear, Stearns & Co. Inc, SG Cowen and Wit Capital Corp., the initial public offering left 16.7 million shares outstanding.
There were no selling shareholders. Venture investors included Warburg, PincusVentures Inc., The Productivity Fund III and Environmental Private Equity Fund II.
Cobalt helps to develop and implement e-business strategies and to capitalize on the increasing use of the Internet as a research tool. The company offers its customers Web site design, data services, Internet advertising and training services aimed at effective Internet use.
In April, Cobalt acquired Parts Voice, a company that compiles a database of automobile parts from thousands of automobile dealers.
The company plans to use the expected $50.3 million in proceeds from the IPO to repay debt and for general corporate purposes, including continued investment in services development, expansion of sales and marketing activities and for working capital. Proceeds might also be used for potential acquisitions or investments in complementary businesses, services and technologies.
The company has never been profitable, losing $2.6 million in 1997 and $5.1 million in 1998.
Joseph Landy and Ernest Pomerantz, managing directors of E.M. Warburg, Pincus & Co., both joined the company’s board of directors in October 1998.
Cobalt Group – Selected Financial
(in thousands, except per share data)
March 17, 1995 (inception) Year Ended December 31 Three Months Ended March 31
to December 31, 1995* 1996 1997 1998 1998* 1999*
Toral revenue 70 312 1,711 6,245 1,079 2,453
Net income -415 -828 -2,665 -5,105 1,162 -2,335
Net income per share -0.24 -0.24 -0.77 -4.74 0.34 -1.97