Razorfish files to go public

The company, which helps businesses manage the move from Main Street to the digital world, estimates the stock sale will raise $50 million.

Feb. 6, 2002 5:10 a.m. PT

3 min read

WASHINGTON--Razorfish, a New York-based company that helps businesses manage the move from Main Street to the digital world, filed with the Securities and Exchange Commission for an initial public offering.

Established in 1995, Razorfish will seek to sell common stock through an underwriting group led by Credit Suisse First Boston, according to a registration statement filed with the SEC. The company estimated the stock sale would raise $50 million, though this figure was used solely to calculate the SEC registration fee.

Razorfish's fortunes are tied directly to a growing use of the Internet that has prompted companies to update their business practices through digital communications solutions. Razorfish, according to the SEC filing, provides such solutions.

The company differentiates itself from those who simply design Web sites, according to the SEC filing. In contrast, Razorfish says it provides a broad range of integrated services and that its solutions also address other forms of digital communications, including wireless, satellite, and broadband communications.

Company services include consulting, software design, and the creation of interfaces for communications by employees vendors and customers. One such project, according to the SEC filing, involved the redesign of an online trading system for Charles Schwab that now accounts for about 51 percent of the brokerage's daily trading volume.

Razorfish lists only two executives who are over 40 years of age: Peter Seidler, chief creative officer, and Thomas Randerz, vice president for European operations. Cofounders Jeffrey Dachis and Craig Kanarick are each 32 years old.

Dachis, the company's chief executive, holds a bachelor's degree in dance and dramatic literature from the State University of New York and a Master's degree in media and entertainment from New York University. Kanarick, chief scientist and vice chairman, holds bachelor's degrees in philosophy and computer science from the University of Pennsylvania and a Master's degree in visual studies from the MIT media lab at the Massachusetts Institute of Technology.

A subsidiary of Omnicom Group, a New York-based advertising company, holds a 37.7 percent stake in Razorfish comprised of 15.9 million shares. Spray Ventures AB of Stockholm, Sweden, holds a 37.5 percent stake.

Razorfish recorded a $394,000 loss for the first nine months of 1998, widening the $125,000 loss recorded during the same period in 1997. Revenues rose to $9.12 million in the first nine months of 1998 from $1.84 million during the same period one year earlier.

However, the company's revenues will be higher going forward because Razorfish made several acquisitions during 1998. If Razorfish had already owned these businesses, revenue for the first nine months of 1998 would have totaled about $21.8 million, up from $11.56 million one year earlier.

The company will use the IPO proceeds for general corporate purposes, which may include expanding its human resources department and hiring qualified personnel. The company may also devote some of the funds to development of a formal sales and marketing department, expansion, acquisitions, and working capital.

The term "razor fish" is usually used to refer to wrasses, according to Webster's Third New International Dictionary. These are brilliantly colored fish--related to parrot fish--that are common along rocky shores.

Razorfish will seek to have its shares trade on the Nasdaq Stock Market. In addition to Credit Suisse, the underwriters for the stock sale will include BancBoston Robertson Stephens, BT Alex. Brown, and Lehman Brothers.