Sonos IPO To Reach $264M

Wireless speaker pioneer Sonos Inc. plans to raise as much as $264.1 million in its upcoming initial public offering.

According to Bloomberg, the company — which competes with Amazon, Google and Apple — introduced its first home-audio system in 2005. Today, it reports that its customers listen to about 70 hours of content a month, and its products are now in about 7 million households worldwide.

The California-based company is selling 13.9 million shares at a price of $17 to $19 a share, it revealed in a regulatory filing Monday (July 23). The underwriters have been given the right to buy an additional 2.08 million shares to cover any over-allotment.

The total market valuation of Sonos at $19 a share would amount to $1.87 billion, or $2.2 billion on a fully diluted basis. However, sources said in April that Sonos was targeting a valuation of $2.5 billion to $3 billion in the IPO.

In fiscal 2017, Sonos posted a net loss of $14.2 million on revenue of $992.5 million, down from a net loss of $38.2 million on $901.3 million of revenue in the previous financial year, according to a filing.

There was more good news, with revenues of $655.7 million posted in the six months ended March 31, 2018. In addition, the company turned a profit, with net income for the same period reached just $13.1 million.

To better take on its competitors, Sonos is switching its product line to voice-activated speakers. It launched its first such home theater product — the Sonos Beam — in July, following the launch of the Sonos One last October.

The company is also working to make deals with other firms that have developed voice-control technology. Its products now support Apple’s AirPlay 2 wireless music-streaming system, as well as Google’s Assistant.

According to the IPO filings, additional Sonos investors include KKR & Co., which owned an almost 26 percent stake as of June 30,  Index Ventures, which owns about 13 percent, and Sonos co-founder John MacFarlane, who owns about 10 percent.