Despegar.Com IPO Preview

Company: Despegar.com, Corp.
Symbol: DESP
Description: They are the leading online travel company in Latin America, known by our two brands, Despegar, our global brand, and Decolar, our Brazilian brand.
Shares: 12.8 million
Range: $23.00-$26.00
Trade Date: 9/20
Underwriter(s): Morgan Stanley, Citigroup
Co-Manager(s): Itau BBA, UBS Investment Bank, Cowen, KeyBanc Capital Markets

Link to S-1/A Prospectus

Link to Retail Roadshow

Business: They have a comprehensive product offering, including airline tickets, packages, hotels and other travel-related products, which enables consumers to find, compare, plan and purchase travel products easily through their marketplace. They provide their network of travel suppliers a technology platform for managing the distribution of their products and access to their users. They believe that their focus on the underpenetrated Latin American online travel market, their knowledge of the consumer and supplier landscape and their ability to manage the business successfully through economic cycles will allow them to continue our industry leadership.

Financials: In the six months ended June 30, 2017 and the year ended December 31, 2016, they had approximately 2.5 million and 4.0 million customers, generating $248.5 million and $411.2 million in revenue, respectively. Their gross bookings were $2.1 billion and $3.3 billion in the six month ended June 30, 2017 and the year ended December 31, 2016, respectively.

Competition and Sector Performance: 

• Booking.Com (subsidiary of Priceline) — PCLN up 29% in last 52-weeks
• Expedia Inc — EXPE up 30$ in last 52 weeks
• Google –  GOOGL up 18% in last 52 weeks
• Airbnb – Private ‘unicorn’ with valuation with $31bn valuation
• CVC Brasil Operadora – Up roughly 75% in last year on the BVMF exchange

Book-Building Status: The way the book comes together during the week of the roadshow is the most critical indicator to first-day and first-week performance. IPO Boutique uses its 45 years of experience and sources all over the street to gather daily subscription levels, specific price guidance and what type of investors are currently in the book or are anchoring orders in the book. In addition, recent underwriter performance on sector specific deals is a strong factor that IPO Boutique takes into account when determining if our clients should indicate for any offering.

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