Hoover's Hopes to Raise $49 Million in IPO
Jim Milliot -- Publishers Weekly, 6/7/1999
Hoover's Inc., the business information publisher founded by Gary Hoover (who also founded the Bookstop superstore chain) filed a registration statement in May declaring its intention to make a public offering that it hopes will generate approximately $49 million. Hoover's, based in Austin, Tex., indicated it will use the proceeds from the offering to fund increased marketing efforts, for further development of Hoover's Online and for potential acquisitions and general corporate purposes.Founded in 1990 as the Reference Press, the house has created profiles of 14,000 companies in 45 industries. With the growth of the Internet, the publisher changed its name and launched Hoover's Online in 1995. Since that launch, company focus has steadily shifted from traditional print media to providing business information through the Internet. Between fiscal 1997 and 1999, Hoover's online sales increased 467%, while revenues from its print and CD-ROM products fell 9%.
The company indicated that it expects to produce and sell print and CD-ROM products for at least the next two years, although it anticipates that the revenue from these lines will decline as a percentage of overall sales. Hoover's sees its growth coming from increased online sales as well as larger revenues from advertisers and from e-commerce.
Despite the company's fast growth in recent years, Hoover's has never turned a profit and has an accumulated deficit of $8.5 million; it racked up its biggest loss, $2.2 million, last year.
Although the publisher is turning away from print, its largest shareholder is Warner Books, which acquired a stake in 1994 and now owns 3.5 million shares. Time Warner Trade Publishing CEO Larry Kirshbaum is a member of the Hoover's board.
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