Expedia's Trivago Preps to Raise Up to $400 Million in IPO

Expedia's (EXPE) German hotel search platform Trivago filed with the SEC on Monday for a U.S. initial public offering of up to $400 million, after a weak tech IPO environment in the first half of 2016.

Through its holding company Travel BV, Trivago plans to list itself on the Nasdaq under the ticker "TRVG." The company will sell class A American depositary shares in the initial offering, with a yet-unannounced number being sold by the company and the remainder being sold by existing shareholders.

The offering will be led by banks JPMorgan (JPM) , Goldman Sachs  (GS) and Morgan Stanley (MS) .

Expedia purchased a 61.6% equity stake in Trivago for $564 million in 2013, which Cowen analyst Kevin Kopelman estimated earlier this year is now worth about $3.2 billion. Expedia, based in Bellevue, WA, will hold class B ADSs in Trivago after the offering, and won't be selling any of its shares in the initial offering.

Trivago said in the filing that it would be classified as a "controlled company" with Expedia at the helm.

Kopelman projects that Trivago as a whole is worth approximately $5.0 billion. In Expedia's third-quarter earnings release on Oct. 27, the company said that Trivago's third-quarter revenue gained 57% year-over-year to $276 million.

Trivago warned in the filing that one of the risks associated with its business is its inability to manage that rapid growth. "While we expect our business to continue to grow, we may not be able to maintain our historical growth rates in future periods," Trivago said on Monday.

Expedia could be looking to cash in on another fast-growing business with Trivago's upcoming IPO, according to Skift. The move to take Trivago public mirrors Expedia's spin-off of its former travel website unit TripAdvisor (TRIP) , which the company completed in December, 2011.

TripAdvisor's IPO valued the company at about $4 billion. Today, the company has a market cap of roughly $6.7 billion.

Business Insider previously reported that Trivago would complete its IPO by the end of November, but noted on Monday that despite the late filing, the company could still finish the offering by year's end.

If Trivago goes public by the end of 2016, the company's initial offering could be one of the biggest of the year, Business Insider added.

Shares of Expedia closed up 3.9% to $123.54 on Tuesday.

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