Russian Internet Company Yandex Prepares for $1 Billion IPO

Includes: DB, GS, MS
by: Renaissance Capital IPO Research

Yandex N.V., which operates Russia's most popular search engine and most visited site, filed on Thursday with the SEC to raise up to $ 1 billion in an initial public offering. The company, which was founded in 1989 and launched the website in 1997, joins the ranks of fast-growing, international Internet companies recently added to the IPO pipeline, including Renren Inc. (NYSE:RENN) and (NASDAQ:DATE).

According to the SEC filing, the website generated 64% of all search traffic in Russia and attracted 38.3 million unique visitors in the month of March 2011. Visitors use the site for its advanced search technology and information retrieval services. With a focus on their principal geographic market, Yandex aggregates and organizes extensive local, national and international content as well as offering a broad range of additional services.

The rapidly expanding company generates revenue through online advertising; it booked $212 million in Adjusted EBITDA on $440 million in sales last year, a 43% increase from the $308 million in sales booked in 2009. The company booked $70 million in sales in 2006, representing a 45% four year-CAGR. The company plans on using the proceeds from the offering for the development of technological infrastructure with a portion held to acquire or invest in new technology, teams, or businesses that might complement Yandex's core business. Principal shareholders include Tiger Global and Baring Vostok Capital Partners.

Yandex plans to list on the NASDAQ under the symbol (YNDX). Morgan Stanley (NYSE:MS), Deutsche Bank Securities (NYSE:DB), and Goldman, Sachs & Co. (NYSE:GS) are the lead underwriters on the deal. No pricing terms were disclosed.