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Sonos files for IPO
Posted on Tuesday, 10 July 2018 10:16
California-based wireless speaker manufacturer Sonos has announced it has filed for an initial public offering (IPO).
The company did not disclose the size of the offering, and cautioned that increasing tensions in trade between the US and China could adversely impact its business.
Import tariffs would result in higher product prices, which could alienate customers and harm its reputation.
Sonos will use portions of the net proceeds from the offering for working capital, or acquiring complimentary businesses and assets, but will not profit from shareholder’s sales of common stock.
Media reports state the company is pursuing a valuation of around USD 2.50 billion.
It has confirmed a placeholder agreement worth USD 100.00 million, which is based on registration fees and does not indicate the eventual price of the IPO.
Formed in 2002, Sonos claims to be a leader in wireless home audio products including speakers and voice enabled devices for home theatres.
The company posted revenues of USD 992.52 million in the year ending 30th September 2017, compared to USD 901.28 million on 1st October 2016.
It has a wide global distribution, with products being sold in more than 50 countries, with 55.00 per cent of its turnover achieved in regions outside the US such as in Asia.
Sonos also recently introduced a new voice controlled speaker product, integrated with Amazon’s Alexa technology and Apple’s HomePod and its Siri function.
The target’s competitive market however, could pose risks for a possible transaction, as it states it is reliant on technology partners to develop its products that are already invested in voice-enabled technology.
As Wired notes, this means as a result, other retailers including Apple and Amazon, could promote and sell its brands at the expense of Sonos, and remove the company’s products from its retail channels.
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