Bronnercom Eyes IPO for 2000

Cash Needed for Global Expansion; Market Awaits Financials
BOSTON–After more than 15 years of organic growth, Bronnercom is preparing to make an initial public offering early next year, sources said last week.
With nearly $1.5 billion in total billings and an estimated $185 million in projected 1999 revenues, agency executives believe their goal of transforming the Boston-based, four-office agency into a global network can only be achieved by the cash infusion an IPO can generate, sources said.
CEO David Kenny declined to comment, but sources said the staff has been informed that an IPO is on the table for early 2000. The process, according to one source, is “fairly far along,” although the agency has not filed its preliminary prospectus–detailing its financial data for the past five years–with the Securities and Exchange Commission.
Bill Montbleau, a Burlington, Mass.-based agency consultant, said the shop’s strong interactive unit (accounting for about half of its revenue and staff), coupled with favorable market conditions, make the time right for such a shop to do an IPO.
Estimating an initial price per share is tricky, however, as the shop has yet to make its balance sheet public, detail its current shareholder situation among top executives or say what percentage of ownership will be issued, Montbleau said.
A year ago, San Francisco investment firm Hellman & Friedman bought roughly 20 percent of Bronnercom for an estimated $60-80 million in cash [Adweek, Dec. 14, 1998]. It is believed that Hellman–a key player in Young & Rubicam’s 1998 IPO–is in part driving the deal, especially now that it has finished selling its stake in Y&R.
Last week, Bronnercom announced an $8.2 million expansion of its Manhattan operation, which plans to move into new digs next year and bolster its staff from 200 to 500. The agency also welcomed an estimated eight-figure direct and interactive account from e-commerce firm Industry to Industry. –with Joan Voight