pursuits

Bravofly Shares Fall on Online Booking Website’s Trading

Bravofly Rumbo Group, the online travel booking service that had $17 million in profit last year, raised 17 times that amount in a share sale as investors piled on even amid a sell-off in technology stocks.

Bravofly sold 5.3 million shares at 48 francs apiece in the 256 million-franc ($291 million) initial public offering of about 37 percent of the Swiss company, it said in a statement. The offer was “multiple times over-subscribed” with an original price range of 40 francs to 52 francs, and was done more quickly than expected, the Chiasso-based company said.

Online travel companies are “completely disrupting the industry’s business model,” Peter Garnry, an equity strategist at Saxo Bank A/S, wrote in a note. Bravofly is “daring with a lofty valuation” after the “recent rout in U.S. technology stocks.” The Nasdaq Composite Index is down 5 percent this year after investors soured on technology valuations.

The sale by Bravofly, whose shareholders include the founders, the Agnelli family and Ardian, the private-equity firm formerly known as AXA Private Equity, comes amid a consolidation of European travel websites. EDreams Odigeo, a Spanish booking website, had its initial public offering April 8 in Madrid, and is now valued at 1.12 billion euros ($1.55 billion).

Bravofly’s site is used to arrange flights, cruises, hotels and rental cars. The company is planning to use the proceeds from the IPO for acquisitions and to expand geographically as it competes with more established travel websites such as Expedia Inc. and Kayak Software Corp.

Purchase Plans

“We did two acquisitions in the last two years, so we want to boost this process, and raising capital will help us,” Chief Executive Officer Francesco Signoretti said on April 1.

The Swiss company’s shares opened at 45 Swiss francs and fell to 44.5 francs at the close of trading in Zurich. EDreams Odigeo also opened lower than its IPO price, on April 8, and has since risen almost 5 percent.

European online bookings may rise 9.2 percent this year to $117.2 billion, Goldman Sachs Group Inc. wrote in a report last month. Bravofly’s profit rose to 12.4 million euros in 2013 from 7.2 million euros in 2012.

“Is this high valuation justified?” Garnry asked. “Well, to some extent, because the company’s sales growth is considerably higher than its peers with revenue growing 70 percent and 65 percent in 2012 and 2013.”

Bravofly’s books were covered on April 2, one day after it started the IPO, two people familiar with the matter who asked not to be named told Bloomberg News. Bravofly accelerated the share sale timetable on April 9, citing strong investor demand.

Buying In

“This is a unique growth story in Europe and our take is that investors will buy into it,” Garnry said.

Bravofly traces its roots to the launch of Vologratis, a search engine for low-cost flights in Italy, in 2004. It has websites in 14 languages, localized for 35 countries, and primarily serves Italy, Spain and France. It is building business in markets such as Germany, eastern Europe and Scandinavia, and plans expansion to Asia and Latin America.

Credit Suisse Group AG, Morgan Stanley and UBS AG were joint global coordinators and joint bookrunners for the IPO. Mediobanca SpA acted as joint bookrunner for the offering, Bravofly said.

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