UPDATE 1-Synacor pulls IPO, cites market conditions
NEW YORK, Oct 14 (Reuters) - Synacor Inc, which provides an Internet platform and digital content for broadband service companies, withdrew its application on Tuesday for an initial public offering, citing market conditions, according to a regulatory filing.
The Buffalo, N.Y.-based company filed in August 2007 for an IPO estimated to raise about $86.3 million dollars.
"The chances of a successful flotation were slim," said Scott Sweet, a senior managing partner with advisory firm IPO Boutique, referring to the volatile markets that eschew unproven companies that repeatedly post losses.
In the year ended Dec. 31, 2007, the company posted a loss of $1.6 million on sales of just under $40 million, which were up 51 percent from a year earlier. But according to the filing, the company has "incurred significant losses since inception," something Sweet said doomed the deal.
"That is not soothing rhetoric for skittish IPO buyers," he said.
The company become the latest to drop plans for an IPO in the toughest market in years. Last week, five companies withdrew their applications with the market. So far this year, the slowest since 2003 for IPO activity, only 30 deals have gone ahead, raising $26.3 billion, less than a quarter of the activity at this time last year.
The last launch was in early August, when San Antonio-based web hosting company Rackspace Hosting Inc (RAX.N) had its IPO. Prior to that, the most recent IPO by a technology company was in February by ArcSight Inc (ARST.O), a provider of security and compliance management software.
According to the filing, Synacor was originally founded in 1998 under the name Chek Inc as an Internet messaging technology provider. In 2000, it bought MyPersonal.com, a community portal developer and changed its name to CKMP. In July 2001, the company changed its name to Synacor.
The company intended to use the proceeds of the deal for working capital, general corporate purposes and possible acquisitions.
The lead underwriter for the deal was Deutsche Bank Securities (DBKGn.DE). (Reporting by Phil Wahba; Editing by Andre Grenon)
