Drugstore.com Files to Raise as Much as $67.5 Million in IPO
Bloomberg News
May 19, 1999, 3:26 p.m. PT
Drugstore.com Files to Raise as Much as $67.5 Million in IPO
Washington, May 19 (Bloomberg) -- Drugstore.com Inc., an online
retailer of drugs and healthcare products that is backed by Amazon.com
Inc., filed for an initial stock sale that could raise as much as $67.5
million.
The Bellevue, Washington-based company was formed last year and
started selling products in February. Drugstore.com is led by former
Microsoft Corp. executive Peter Neupert, 43, and counts Microsoft
co-founder Paul Allen's Vulcan Ventures Inc. and Starbucks Corp.
Chairman Howard Schultz among its top investors.
Amazon.com, the online retailer of books and music, holds a 43.8
percent stake before the IPO.
Staking out a place in the online medicine and personal-care market could
be big business: Total U.S. sales of drugs, vitamins and personal-care
products will reach $180 billion this year, estimates Mark Husson, a
Merrill Lynch analyst. That's almost five times the $38.5 billion in total
sales Forrester Research Inc. projects this year for books and music, two
of the most successful online categories.
Drugstore.com and other startups, including CVS's Corp.'s newly
purchased Soma.com, PlanetRX Inc. and RX.com, are betting they can
win over a lot of busy bargain hunters. They say the convenience of
buying online also will help them tap the growing demand for health-care
products from an aging U.S. population.
The prescription business is especially appealing. Surging sales to older
consumers helped boost prescription sales 15 percent last year to $102.5
billion, according to the National Association of Chain Drug Stores. That
makes prescriptions one of the fastest-growing parts of U.S. retailing.
Drugstore.com said it may use proceeds from the stock sale to make
acquisitions. The company decided to go public in part to ''to increase
our working capital'' and to ''increase our visibility in the retail
marketplace,'' according to a filing with the Securities and Exchange
Commission.
Drugstore.com didn't specify the number of shares it would sell or their
estimated price range. Those details will be included in a supplemental
filing. The $67.5 million top value was used solely to calculate a
registration fee.
An underwriting group led by Morgan Stanley Dean Witter will market
shares to the public. Drugstore.com has applied to trade on the Nasdaq
Stock Market under the symbol ''DSCM.'' |
