Vonage, the internet telephone service provider, is looking to raise $250 million (£143 million) in an initial public offering (IPO) as it seeks to expand its subscriber base in the face of stiff competition.
The move would also allow Vonage, which is backed by the private equity groups 3i and Bain Capital, to pursue acquisitions as rivals such as Comcast begin to offer phone services with packages of cable TV and internet. It comes as the heavily loss-making Vonage has replaced its chief executive, Jeffrey Citron, its founder, with Mike Synder, a Tyco executive.
In a filing with the US Securities and Exchange Commission, Vonage said that terms had not been set for the IPO, expected to be led by the underwriters Citigroup, Deutsche Bank Securities, and UBS Investment Bank. An IPO will add to the $658 million that Vonage has raised from private equity firms since it started in 2001.
Vonage, which lets subscribers make calls using a phone linked to a high-speed internet line, recorded a $189.6 million loss in the nine months to September. Revenues came in at $174.0 million, and $176.3 million was spent on marketing.