Organic is healthier

27 June 2011 By Robert Cyran Follow @rob_cyran

The vacation home rental listing service is the latest Web outfit seeking an outsized IPO valuation above $2 bln. The business looks solid, yet the firm has goosed expansion through M&A. Investors are hungry for growth, but they should be warier of the acquired kind.

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HomeAway, which lists vacation home rentals online, plans to sell 5.9 million shares and insiders plan to sell 2.1 million shares in an initial public offering due to price on June 28.

The indicated price range is $24 to $27 a share. The company would be worth up to $2.2 billion following the offering.

The company plans to use the proceeds to redeem preferred stock, pay accumulated dividends and for general corporate purposes.

HomeAway's revenue in 2010 was $168 million, an increase of 40 percent from 2009. Operating income increased 26 percent over the same period to $13.8 million in 2010.

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