Editor’s note: This story has been corrected to note that an offering of Zillow shares that closed Sept. 24 was a follow-on offering dilutive to existing shareholders, not a secondary offering of previously issued shares.
Zillow Inc. could raise more than $100 million in additional capital through a follow-on offering of more than 3 million shares announced by the company today.
Zillow said it will offer 3.175 million shares of Class A common stock to increase the company’s "public float" and raise additional capital.
At Zillow’s closing price today of $42.43, the offering would raise about $134.7 million before expenses, although the company’s share price was down slightly in after-hours trading. That would exceed the $75.7 million Zillow raised in a July 2011 initial public offering and private placement of 3.7 million shares priced at $20 each.
Zillow is granting underwriters an option to purchase up to 525,000 additional shares of Class A common stock. In addition, existing shareholders including company founders Rich Barton and Lloyd Frink will be allowed to sell 325,000 shares in the offering that won’t generate proceeds for Zillow.
In a regulatory filing, Zillow said its management team "will have broad discretion in using these proceeds." Eligible "general corporate purposes" may include sales and marketing activities, general and administrative matters and capital expenditures.
"We may also use a portion of these proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments," Zillow said.
The popular real estate portal — which is currently advertising 24 job openings — says its growth strategies include building up its database of homes and using it as the foundation for new insights and tools.
Zillow also plans on innovating and expanding its offerings for mobile devices, creating new opportunities for "consumer-initiated connections" with real estate, rental and mortgage professionals, and expanding its offerings beyond advertising services for real estate professionals by developing additional marketing and business technology solutions.
The company also intends to "pursue strategic opportunities, including commercial relationships and acquisitions, to strengthen our market position, enhance our capabilities and accelerate our growth."
Last fall, Zillow acquired Diverse Solutions, a listings content provider that powers property searches for real estate agents’ websites and mobile platforms, for $7.8 million. In May, Zillow announced a deal to buy rental relationship management software provider RentJuice Corp. for $40 million.
Zillow rival Move Inc., which operates Realtor.com under the terms of an agreement with the National Association of Realtors, this week announced its acquisition of real estate lead generation and management company TigerLead Solutions LLC for $22 million.
Move had previously acquired social media search platform SocialBios in July 2011, after entering the listing syndication business in 2010 through the purchase of ListHub parent company Threewide Corp. for $13.1 million.
