HomeGrocer expects more from stock sale

The online grocer provides new estimates on the size of its initial public offering, stating it will sell 22 million shares at $10 to $12 each.

Feb. 6, 2002 9:03 a.m. PT

2 min read

HomeGrocer.com provided new estimates on the size of its initial public offering, stating it will sell 22 million common shares at $10 to $12 each.

The Kirkland, Wash., online grocer's stock sale could raise as much as $264 million before expenses if shares sell at the top of that range. HomeGrocer originally estimated the stock sale would raise as much as $250 million when it first filed for the IPO in December. That estimate was made primarily to calculate a Securities and Exchange Commission registration fee.

Amazon.com-backed HomeGrocer provided the revised estimates in an amended registration filed today. The company estimated the IPO will raise $226.1 million after the costs of the offering. The company said it would use the proceeds to fund its expansion and provide working capital.

HomeGrocer will have 124.8 million shares outstanding after the IPO, giving the company an initial market value of almost $1.5 billion if its shares sell at the top of the estimated price range.

According to its regulatory filing, HomeGrocer lost $78 million last year on $21.6 million in revenue. The company lost $7.9 million on $1.1 million in revenue in 1999.

HomeGrocer said that it plans to expand its service into Dallas, Texas; Southern Connecticut; San Diego, Calif.; Atlanta, Ga.; and the San Francisco Bay Area this year. The expansion would bring Homegrocer into direct competition with online grocery rival Webvan for the first time. Webvan currently operates in the San Francisco area and is planning to move into Atlanta this year.

HomeGrocer currently operates in Seattle; Portland, Ore.; and Orange County, Calif., and has stated previously that it plans to expand into 8 to 10 new cities this year.

Underwriters for the stock sale will include Morgan Stanley Dean Witter and Donaldson Lufkin & Jenrette. HomeGrocer will seek to have its shares trade on the Nasdaq stock market under the ticker symbol "HOMG."

News.com's Troy Wolverton contributed to this report.