Vacation Rental Website HomeAway Prepares for $230 Million IPO

| About: HomeAway, Inc. (AWAY)

HomeAway, Inc., (NASDAQ:AWAY) which operates the world's largest online marketplace for vacation rentals, filed on Friday with the SEC to raise up to $230 million in an initial public offering. The Austin, TX-based company, which was founded in 2004 and launched commercial operations in 2005, joins the list of fast-growing Internet companies recently added to the IPO pipeline, along with Pandora Media (PNDR) and LinkedIn Corporation (NYSE:LNKD).

According to the SEC filing, the vacation rental website attracted over 220 million visits and averaged over 9.5 million monthly visitors last year. Travelers use the website free of charge and are able to search through more than 500,000 paid listings for vacation rentals of properties located in more than 145 countries. The rapidly expanding company generates revenue by charging property owners for one-year listings; it booked $43 million in Adjusted EBITDA on $168 million in sales last year, a 40% increase from the $120 million in sales booked in 2009. The company booked $18 million in sales in 2006, representing a 75% four year-CAGR. HomeAway also benefits from strong cash flow generation ($62 million in 2010; +38% YoY) thanks to its advance payment, subscription-based model and high renewal rates (76%).

Principal shareholders include Austin Ventures (24% stake), Redpoint Ventures (19%), Technology Crossover Ventures (15%), Institutional Venture Partners (9%) and Tiger Global Management (6%). From 2005 to 2010, the company has raised an impressive $404 million in equity and $111 million in bank debt.

HomeAway plans to list its common shares under the symbol AWAY. Morgan Stanley (NYSE:MS), Deutsche Bank Securities (NYSE:DB), Goldman, Sachs & Co. (NYSE:GS) and J.P. Morgan (NYSE:JPM) are the lead underwriters on the deal, for which pricing terms and timing were not disclosed.