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Summary

  • A leading digital health and wellness company that competes with medscape.com, owned by WebMD.com.
  • Top line revenue growth was only 12.5% for 2013 and only 10.5% for 2012.
  • Mayo Clinic has indicated an interest in purchasing up to $10 million on the IPO.

Based in New York, Everyday Health (NYSE:EVDY) has scheduled a $100 million IPO on the NYSE with a market capitalization of $416 million at a price range midpoint of $14 for Friday, March 28, 2014.

The full IPO calendar is available at IPOpremium.

SEC Documents
Manager, Joint managers: J.P. Morgan, Credit Suisse, Citigroup
Co-Managers: Stifel, SunTrust Robinson Humphrey.

End of lockup (180 days): Wednesday, September 24, 2014

End of 25-day quiet period: Tuesday, April 22, 2014

Summary
EVDY is a leading digital health and wellness company that competes with medscape.com, owned by WebMD.com. WebMD is profitable. EVDY also competes with Epocrates (NASDAQ:EPOC), which is struggling.

EVDY's lumpy quarters make trend analysis difficult. It was profitable in the December '13 quarter based on revenue expansion of 53% relative to the September '13 quarter.

But last year's December quarter was up 38% and EVDY did lose money for the full 2013 year. -12% loss on $156 million in revenue.

The bigger issue, however, is that top line revenue growth was only 12.5% for 2013 and only 10.5% for 2012.

25% of the IPO is from selling shareholders.

Valuation
Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Everyday Health

$416

2.7

-22.8

3.04

9.09

24%

Conclusion
The rating on EVDY is positive. This market likes online companies who have achieved at least 'critical mass' in top line revenue. Mayo Clinic has indicated an interest in purchasing up to $10 million on the IPO.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business
EVDY is a leading digital health and wellness company.

By combining premium health and wellness content with its sophisticated proprietary data assets and analytics tools, EVDY enables consumers to manage their health, healthcare professionals to stay informed and make better decisions for their patients, and marketers to communicate and engage with consumers and healthcare professionals.

Brands & Solutions
EVDY's brands include Everyday Health, What To Expect, Dr. Sanjay Gupta, Jillian Michaels, Mayo Clinic, Physicians' Desk Reference and numerous other leading industry experts.

EVDY utilizes its proprietary technology, together with its extensive data assets, to personalize the content experience, empower its users to make more-informed health decisions and drive better health outcomes.

EVDY delivers its content and solutions whenever, wherever and however a user makes a health-related decision through multiple channels, including desktop, mobile web, and mobile phone and tablet applications, as well as video and social media.

EVDY also utilizes the data it collects to enable health and wellness marketers to:

  • reach and engage the right audience at the right time;
  • influence purchase decisions;
  • drive health compliance and health outcomes; and
  • quantitatively prove the efficacy of the marketing solutions EVDY implements.

During 2013, EVDY estimates an average of 43 million consumers and 500,000 healthcare professionals interacted with its health and wellness properties on a monthly basis.

EVDY derives a significant majority of its revenues from the sale of advertising, sponsorships and other marketing solutions across a variety of health and wellness categories, including pharmaceuticals, over-the-counter products, food, retail and lifestyle.

To a lesser extent, EVDY generates revenues from the sale of its premium services, which consist primarily of subscriptions sold to individuals who purchase access to one or more properties in its portfolio. EVDY generated total revenues of $125.8 million, $138.5 million and $155.9 million in 2011, 2012 and 2013, respectively.

Dividend Policy
No dividends are planned

Intellectual Property

EVDY currently owns 60 registered trademarks around the world, including Everyday Health and MedPage Today, and have applied to register a number of additional trademarks.

In addition, EVDY owns four patents around the world and one pending patent application in the U.S.

Competition
EVDY faces competition from the following:

Websites that provide online consumer health and wellness information, such as webmd.com;

General interest consumer websites or search engines that offer specialized health sub-channels or functions, such as yahoo.com and google.com;

Websites, mobile applications, digital devices and other products and services directed at consumers relating to specific conditions, programs or other specific types of health, wellness and lifestyle content;

Websites, mobile applications and other products and services that target healthcare professionals, including websites such as medscape.com (owned by WebMD) and mobile applications offered by Epocrates;

Other high-traffic websites that include both health-related and non-health-related content and services, including social media websites, such as facebook.com; and

Non-profit and governmental websites that provide consumer health information, such as fda.gov, cdc.gov and health.nih.gov.

Dividend Policy
No dividends are planned.

5% stockholders
Entities affiliated with Rho Ventures 25.4%
WF Holding Company, LLC 24.8%
Scale Venture Partners II, LP 7.2%
Entities affiliated with TCV Ventures 5.9%
Entities affiliated with Foundation Capital 5.1
Entities affiliated with NeoCarta Ventures 5%
Michael Keriakos 5.4%
Habib Kairouz 25%

Use of proceeds
25% of the IPO is from selling shareholders. EVDY expects to net $67 million from its IPO. Proceeds are allocated as follows:

  • working capital and general corporate purposes, including funding capital expenditures and operating losses. EVDY may also use a portion of the net proceeds to repay borrowings under its credit facility or acquire complementary businesses, products or technologies.

Disclaimer: This EVDY IPO report is based on a reading and analysis of EVDY's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Source: IPO Preview: Everyday Health