CARGURUS, INC. IPO Dates, History,Price Band, Market Lot Details-2017

Company Description- CarGurus is a global, online automotive marketplace connecting buyers and
sellers of new and used cars. Using proprietary technology, search algorithms, and innovative data analytics, we believe we are building the world’s most trusted and transparent automotive marketplace and creating a differentiated automotive search experience for consumers. Our trusted marketplace empowers users with unbiased third-party validation on pricing and dealer reputation as well as other information that aids them in finding “Great Deals from Great Dealers.” As of June 30, 2017, we had an active dealer network of over 40,000 dealers, and our selection of over 5.4 million car listings is the largest number of car listings available on any of the major U.S. online automotive marketplaces. In addition to the United States, we operate online marketplaces in Canada, the United Kingdom, and Germany.

We were originally organized on November 10, 2005, as a Massachusetts limited liability company under the name “Nimalex LLC.” Effective July 15, 2006, we changed our name to “CarGurus LLC.” On June 26, 2015, we converted into a Delaware corporation and changed our name to “CarGurus, Inc.”Our principal executive offices are located at 2 Canal Park, 4th Floor, Cambridge, Massachusetts 02141, and our telephone number is (617) 354-0068. Our website is www.cargurus.com

Proposed Symbols: CARG

Market: NASDAQ Global Select

CIK: 0001494259

Address: 2 CANAL PARK

City, State, Zip: CAMBRIDGE ,MA 02141

Telephone: 617 354 0068

CEO: Langley Steinert

Employee Count: 514

Fiscal Year: 12/31

URL: www.cargurus.com

 

Deal Data
Status: Filed

Share Price: 13.00-15.00

Shares Offered: 9,400,000

Offer Amount:

Total Expenses: $4,100,000.00

Shares Over Alloted: 1,410,000

Shareholder Shares Offered: 6,900,000

Shares Outstanding: 77,145,294

Lockup Period / Expiration:

Quiet Period Expiration:
Financials
Revenue: $143,275,000.00

Net Income: $8,553,000.00

Total Assets: $115,606,000.00

Total Liabilities: $41,852,000.00

Stockholders’ Equity: ($58,944,000.00)
 Advisors

Lead Underwriter(s): 
Goldman Sachs & Co. LLC

Underwriter(s) :
Allen & Company LLC
JMP Securities LLC
Raymond James and Associates, Inc.
RBC Capital Markets, LLC
William Blair and Co., L.L.C.

Company Counsel :
Morgan, Lewis & Bockius LLP
Underwriter Counsel :
Wilmer Cutler Pickering Hale and Dorr LLP
Auditor :
Ernst & Young LLP
Transfer Agent :
Broadridge Corporate Issuer Solutions

Description of Business- 

A core principle of our marketplace is unbiased transparency. For consumers
considering used vehicles, we aggregate vehicle inventory from dealers and apply
our proprietary analysis to generate a Deal Rating as either: Great Deal, Good
The deal, Fair Deal, High Priced, or Overpriced. Deal Rating illustrates how
competitive a listing is compared to similar cars sold in the same region in
recent history. We determine Deal Rating principally on the basis of both our
proprietary Instant Market Value, or IMV, algorithm, which determines the market
value of any given vehicle in a local market, and Dealer Rating, a measure of a
dealer’s reputation as determined by reviews of that dealer from our user
community. By sorting organic search results based on a used car’s Deal Rating,
we enable consumers to find the most relevant car for their needs. We also
provide our users’ information historically not widely available, such as Price
History, Time on Site, and Vehicle History. We believe this approach brings
greater transparency, trust, and efficiency to a consumer’s car research and
buying process, leading to higher engagement and a more informed consumer who is
better prepared to purchase at the dealership.

According to Google Analytics, in the second quarter of 2017, we had
approximately 61 million average monthly sessions in the United States, up from
approximately 45 million during the same period in 2016. According to comScore,
we have become the most visited online automotive marketplace in the United
States, and we have the largest mobile audience, with over 78% of our second
quarter 2017 monthly unique visitors accessing our marketplace from mobile
devices. Our focus on providing unbiased transparency for consumers has also
created an engaged user community. According to comScore, during the second
the quarter of 2017, visitors returned to our site 2.4 times as often as any other
major U.S. online automotive marketplace, up from 1.8 times as often in the
second quarter of 2016.

Our large, engaged, and predominantly mobile user base presents an attractive
audience of in-market consumers for our dealers. By connecting dealers with more
informed consumers, we believe we provide dealers with an efficient customer
acquisition channel and attractive returns on their marketing spend with us.
Dealers can list their inventory in our marketplace for free with our Basic
Listing product or with a paid subscription to our Enhanced or Featured Listing
products. Dealers with free listings receive anonymized email connections and access
to a subset of the tools on our Dealer Dashboard at no cost. Dealers with
a paid subscription receive connections to consumers that are not anonymous and
can be made through a wider variety of methods, including phone calls, email,
managed text and chat, links to the dealer’s website, and map directions to dealerships
. In addition, dealers subscribed to our Enhanced and Featured
Listing products gain full access to our Dealer Dashboard and are also able to
display their dealership information to gain brand recognition, which promotes walk-in
traffic to the dealer. Our success with dealers is evidenced by the 66%
growth in the number of paying dealers in our U.S. marketplace from 2015 to
2016.

Our scaled online marketplace model drives powerful network effects. The
industry-leading inventory selection offered by our dealers attracts a large and
engaged consumer audience. The value of robust connections to this audience
incentivizes dealers to purchase our Enhanced or Featured Listing products.
Having more paying dealers provides consumers with more dealer information and
methods to contact them. More consumers and connections drive greater value to
pay dealers on our platform. Driven by these network effects, we continue to
amass more data, which we use to continuously improve our search algorithms, the
accuracy of Deal Ratings, our user experience, and, ultimately, the quality of
the connections between consumers and dealers.

We generate marketplace subscription revenue from dealers through listing and
display advertising subscriptions and advertising revenue from auto
manufacturers and other auto-related brand advertisers. Our rapid revenue growth
and financial performance over the last several years exemplifies the strength
of our marketplace.
We were originally organized on November 10, 2005, as a Massachusetts limited
liability company under the name “Nimalex LLC.” Effective July 15, 2006, we
changed our name to “CarGurus LLC.” On June 26, 2015, we converted into a
Delaware corporation and changed our name to “CarGurus, Inc.”



Use of Proceeds- We estimate that the net proceeds from the sale of 2,500,000 shares of our Class
A common stock in this offering will be approximate $28.5 million, based on an
assumed initial public offering price of $14.00 per share, the midpoint of the
estimated offering price range set forth on the cover page of this prospectus,
after deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us. If the underwriters’ option to purchase
additional shares of Class A common stock from us is exercised in full, we
estimate that our net proceeds would be approximate $37.6 million, after
deducting estimated underwriting discounts and commissions, and estimated
offering expenses payable by us. We will not receive any proceeds from the sale
of shares by the selling stockholders, although we will bear the costs, other
than underwriting discounts and commissions, associated with the sale of these
shares.

Each $1.00 increase or decrease in the assumed initial public offering price of
$14.00 per share, the midpoint of the estimated offering price range set forth
on the cover page of this prospectus, would increase or decrease the net
proceeds that we receive from this offering by approximately $2.3 million,
assuming that the number of shares of Class A common stock offered by us, as set
forth on the cover page of this prospectus, remains the same, and after
deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us. Similarly, each increase or decrease of 1.0
million shares in the number of shares of Class A common stock offered by us
would increase or decrease the net proceeds that we receive from this offering
by approximately $13.0 million, assuming the assumed initial public offering
price of $14.00 per share, the midpoint of the estimated offering price range
set forth on the cover page of this prospectus, remains the same and after
deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us. We do not expect that a change in the offering
price or the number of shares of Class A common stock by these amounts would
have a material effect on our use of the proceeds from this offering.

The principal purposes of this offering are to increase our financial
flexibility, improve our visibility in the marketplace, create a public market
for our Class A common stock, and facilitate our future access to the public
capital markets. We currently intend to use the net proceeds from this offering
primarily for general corporate purposes, including working capital, operating
expenses, and capital expenditures. We may also use a portion of the net
proceeds to acquire or invest in complementary technologies, solutions,
products, services, businesses, or other assets, although we have no present
commitments or agreements to enter into any acquisitions or investments.

As of the date of this prospectus, we cannot specify with certainty all of the
particular uses of the net proceeds from this offering. The amount and timing of
our actual expenditures will depend on numerous factors, including the cash used
in or generated by our operations, sales and marketing efforts, competition, the
pace of our expansion plans, our investments, and acquisitions. Accordingly, we will
have broad discretion in using these proceeds. Pending these uses, we intend
to invest the net proceeds from this offering in short-term and intermediate-term
investment-grade interest-bearing securities and obligations,
such as money market accounts, certificates of deposit, commercial paper, and guaranteed
obligations of the U.S. government. We cannot predict whether the
invested proceeds will yield a favourable return




Competition / Competitors

We face competition to attract consumers and paying dealers to our marketplace
and to attract advertisers to purchase our advertising products and services.
Our competitors offer various marketplaces, products, and services that compete
with us. Some of these competitors include:

• major U.S. online automotive marketplaces: AutoTrader.com, Cars.com, and
TrueCar.com;

• U.S. online automotive content publishers, such as Edmunds.com and KBB.com;

• Internet search engines;

• peer to peer marketplaces; and

• sites operated by individual automobile dealers.

Competition for Consumers and Dealers

We compete for consumer visits with other online automotive marketplaces, free
listing services, general search engines, and dealers’ websites. We compete for
consumers primarily on the basis of the quality of the consumer experience. We
believe we compete favorably on user experience due to the number of our vehicle
listings, the unbiased transparency of the information we provide on cars,
prices, and dealers, the intuitive nature of our user interface, and our leading
mobile user experience, among other factors.

We compete for dealers’ marketing spend with offline customer acquisition
channels, other online automotive marketplaces, dealers’ own customer
acquisition efforts on general search engines, and other Internet sites that
attract consumers searching for vehicles. We compete primarily on the basis of
the ROI that our marketplace provides. We believe we compete favorably due to
our large user audience, high user engagement, and the volume and quality of
connections we provide to well-informed consumers, which results in an
attractive ROI for dealers.

Competition for Advertisers

We compete for a share of advertisers’ total marketing budgets with offline
advertising channels, media sites, websites dedicated to helping consumers shop
for cars, major Internet portals, general search engines, and social media
sites, among other sites. We also compete for a share of advertisers’ overall
marketing budgets with traditional media, such as television, radio, magazines,
newspapers, automotive guide publications, and billboards. We compete for
advertising spend based on the marketing ROI that our marketplace provides. We
believe we compete favorably due to our large user audience size, high user
engagement, and the effectiveness and relevance of our advertising products.



 

 

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