It’s being circulated in the New York Times and Techcrunch that Google Ventures has purchased $25M in shares of HomeAway from existing shareholders at a reported valuation of $1.4B. Techcrunch speculates that the company is seeing revenue of $200M and putting a healthy $70M per year to the bottom line. That would be a price to earnings ratio of 20, which is slightly lower than the average of 21 of the S&P 500 (someone should check my Wall St. math on this).
Without the benefit of inside information, we can only speculate on the deal.
Shareholder liquidity is always fun. If you’re not going to go public anytime soon, insiders always enjoy selling stock. Capital gains tax rates may go up after Jan 1st, and some people need to acquire that new Ferarri 458 or buy that ski cabin in Aspen. If you’re a fund that got in early, you could take most of your investment off the table and let the profit ride!
The strategic value of Google as an investor can’t be overlooked. HomeAway lives off SEO and SEM, and spends tons of money with Google, I imagine. If an inside track gives them any sort of advantage or edge in the search game, HomeAway’s scale will exploit it to the max.
What do your sources say about the deal?