Drugstore.com files IPO specifics
By Bloomberg News
Special to CNET News.com
June 29, 1999, 11:30 a.m. PT
update
Drugstore.com hopes to sell 5 million common shares for $9 to $11 each, the company said in a filing that provided new details on the size of its planned initial public offering.
The Bellevue, Washington, online retailer of drugs and health care products filed with the Securities and Exchange Commission last month to raise as much as $67.5 million. The company filed an amended registration statement yesterday that provided a more specific estimate on the size of the offering.
Drugstore.com will have 42.8 million shares outstanding after the stock sale. If 5 million shares are sold, new investors would be offered almost 12 percent of the company's common stock. If the shares sell for $11 each, Drugstore.com's initial market value would exceed $470 million.
The company expects the stock sale to raise $45.5 million after expenses, assuming a share price of $10. The company expects to use up to half of the proceeds for capital expenditures associated with technology and system upgrades, with the remaining funds devoted to general corporate purposes and working capital.
The updated filing comes one week after Drugstore.com announced deals with Rite Aid and General Nutrition Centers, revealing the affect on Amazon's stake in the company. Rite Aid acquired 25.4 percent of Drugstore.com for $7.6 million and GNC bought 8 percent for $2.5 million; both purchases were made in cash.
The deals diluted Amazon's stake in the company from 43.8 percent to 29.2 percent. After Drugstore.com's public offering, Amazon, Rite Aid and General Nutrition Centers will own 27.4 percent, 21.8 percent and 6.9 percent of the company, respectively.
Other major stock holders include venture capital firms Kleiner Perkins Caufield & Byers and Vulcan Ventures, which currently own 19.1 percent and 6.2 percent of the company, respectively. Drugstore.com's company president Peter Neupert currently owns 5 percent. After the offering, Kleiner Perkins will own 16.4 percent, Vulcan 5.3 percent, and Neupert 4.3 percent.
<ibAll of the major shareholders will retain the same number of shares after the offering, except Amazon, which will acquire $10 million worth of stock at the set price.
(Source:Bloomberg via CNET)
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