More IPO reports on Playtech

[jetset]

Playtech plans to raise 175m in IPO

By Matthew Garrahan, Leisure Industries correspondent, The Financial Times

Published: February 16 2006 20:37 | Last updated: February 16 2006 20:37

Playtech, a software group that builds systems for online gaming operators, is poised to unveil plans for an Aim float that will value it at 550m and net 70m for Teddy Sagi, the Israeli entrepreneur, its largest shareholder.

The group, which could announce the offering on Friday, is taking advantage of investor appetite for online gaming stocks by seeking a 175m placing on Aim. The float will be the biggest so far of 2006.

Strong rumours on similar lines did not come to fruition last year.

 

[caruso]

Excellent info there.

I wonder if Mr. Garahhan knows about African Palace et al ad inf?

 

[jetset]

PLAYTECH LISTING CONFIRMED

Rumours are true - Israeli owned firm plans IPO in London


The rumoured London listing of turnkey provider Playtech was confirmed this (Friday) morning by a company spokesman, who said that his company hoped the shares would be placed with institutional investors by the end of March.

The spokesman confirmed that Playtech plans to raise GBP 175 million in a London stock market flotation that will value it around GBP 550 million.

The firm, majority-owned by Israeli internet-gaming entrepreneur Teddy Sagi, counts the Tote, Bet365 and BetFred among its clients and is the latest in a series of online gambling firms to opt for a London listing. Yesterday, Excapa Software, which also makes online poker software, floated on London's junior AIM market and saw its shares rise 5 percent in early trade.

Cyprus-registered Playtech said in a statement it made sales of GBP 27.4 million and a post-tax profit of GBP 20.5 million for the financial year to December 31, 2005.

Collins Stewart has been appointed as sole bookrunner, nominated advisor and joint broker. Seymour Pierce is joint broker.

Sagi owns 50 percent of the stock - there was a detailed report on the other shareholders in Casinomeister News some weeks back.

 

[caruso]

Seymour Pierce is joint broker.

Really surprises the hell out of me, that does.

Let's see if they can ignore me as resolutely as they did over the Crystal Palace float.

I suppose if you specialise in brokering these kind of floats, the best you can do is keep your head down and pray nobody notices.

Do these people do ANY research? When you handle floats for shady offshore betting operations, do you really just look at the balance sheet and say "Wow, yes, you're really creaming it."? Is that all there is to it? Have they even heard of Google? Bit of lateral thinking, type in "online casino problem", click on Casinomeister or WOL and actually ask questions of people at the chalkface?

 

[jetset]

More detail - the info was flowing fast up to last evening (Friday)

Caruso, I don't believe you should be bad-mouthing brokers here. For God's sake, man they're at a third and occasional remove from the player.

FURTHER DETAIL ON PLAYTECH LISTING (update)

IPO due "within the month" says spokesman


News on what is likely to be one of the biggest online gaming listings on the London AIM this year was coming in thick and fast as the week closed, with a Playtech spokesman revealing plans to sell $300 million in shares in an initial public offering now valuing the company at $950 million.

Earlier this week the Financial Times reported that an IPO was imminent, and Playtech confirmed this early this (Friday) morning.

The British Virgin Islands-based company will probably list the shares "within the month,'' said a spokesman. Teddy Sagi, who helped establish the company, leads a group of shareholders that owns more than 50 percent of the business, the spokesman said.

Playtech designs, develops and licenses software for Internet gaming companies including GoldenPalace.com and Empire Online Ltd., a company that helps gambling Web sites attract players. Playtech has 37 licensees which operate in 89 online casinos, 16 online poker rooms and 14 bingo sites, it said.

Founded in 1999, Playtech had after-tax profit of $35.6 million in 2005, compared with $8.2 million in 2003, the company said in the statement. Sales quadrupled over those two years to $47.6 million.

Playtech competitors include Toronto, Canada-based CryptoLogic Inc., which has a market value of C$379.8 million ($329 million)

While the company's management is based on the Isle of Man, 90 percent of its workers are in Estonia. The company has a ``close relationship'' with the University of Tartu, located in the southern part of the Baltic country, and recruits its graduates as software developers, the spokesman said.

Israeli press coverage on the company late last year included some interesting inside detail, claiming that Playtech was founded in 2000 by NAV New Age Investments Ltd., controlled by Sagi and three 30-something entrepreneurs from central Israel, with current Playtech VP marketing incumbent Elad Cohen as CEO. NAV was delisted from the Tel Aviv Stock Exchange (TASE) in 2003.

The other two founders are said to be Amnon Ben-Zion and CEO Rami Beinish. Ben-Zion and Cohen met during their compulsory military service in the Israeli Defence Force central processing unit. Ben-Zion sold his Playtech stake a year ago.

The article reports that a valuation for Playtech conducted for NAV in late 2002 found that NAV owned 68 percent of the company, Elad Cohen 19 percent, and the other two founders 6 percent and 7 percent, respectively. Playtech was valued at $18.4 million, after deducting debts, a figure that now seems unlikely. The valuation was carried out for a failed attempt by Sagi to obtain capital for the company by issuing 10 percent of its capital to an external investor. The valuation indicated that Playtech had $4.5 million in revenue in 2002, and an operating profit before financing expenses of $1.5 million.

 

[caruso]

That's an excuse to do no research??

If Seymour Pierce had put "online / casino problems", "playtech problems" or whatever into Google, by way of a hardly imaginative piece of lateral thinking to get a better overview of the general perception of the company with the inclusion of player perception, their jaws would have dropped off.

Following your reasoning, no online gambling float broker would do anything better than shut their eyes to the CENTRAL core of the business - the customers - because they're "at a third from the player"!

Sorry, I'll have to disagree on that one. Research means "research", not "selective research". They even list "research" on the home page, LOL.

It doesn't matter. I'll be forwarding to them everything they need to know - albeit late in the day.

 

[jetset]

I would imagine they are dealing with the financial, investor and structural complexities of what is likely to be the biggest IPO on the London AIM this year, but you go right ahead, Caruso.

IMO the people you need to be harrassing as a priority (and don't seem to have done so) are the delinquent casinos and Playtech itself.

 

[caruso]

Emailed Richard Ratner of Seymour Pierce about the African Palace case - I included a full copy of your report.

That a float like this could go ahead in these circumstances is truly mind-boggling. What kind of a message does it send out? This really jeopardises the integrity of the UK financial market.

 

[spearmaster]

I think you're getting a bit carried away. If a large UK corporation in another industry, let's say Land Rover for the heck of it, were to try to float, while some of its dealers were selling cars with false promises of "guaranteed women all over you" or something weird like that, would that damage the integrity of the UK financial community?

Did Partygaming's shady past damage the integrity of the UK financial community? Keep in mind they were not only the software manufacturers, but the operators of the software...

Playtech is a software manufacturer. Plain and simple. While I won't argue the fact that they really ought to exercise better control over their licensees, they are, after all, only a supplier of products and services.

I am firmly with Jetset on this one. And I don't think much will happen with Seymour Pierce, other than that they may try to advise on how to manage the public affairs of the company prior to the float. I highly doubt this information will cause them to rethink their position, or even Playtech's, with regard to a listing.

 

[caruso]

I think you're getting a bit carried away. If a large UK corporation in another industry, let's say Land Rover for the heck of it, were to try to float, while some of its dealers were selling cars with false promises of "guaranteed women all over you" or something weird like that, would that damage the integrity of the UK financial community?

Ha. Marginal difference between creative advertising and...oh, what's the word?..."misappropriating" players' funds.

If Rover dealers started pinching their customers wallets, then it might have an impact.

Sorry if you perceive my concerns moved to action as getting "carried away", lol. Can't help you there at all.

 

[spearmaster]

You miss the point. For all intents and purposes, Land Rover and Playtech are the same. The casino and the car dealer are the same. The best that the manufacturer can do at any point is perhaps close their license or cease to provide service/support to the operator.

I don't see how that is jeopardizing the integrity of the UK financial market. Like Jetset said, complain to Playtech or the operators. Trying to score cheap points off of us will not solve any of these issues.

 

[jetset]

Caruso, I repeat: You would be better employed directing your energy at sending your thoughts, demands and accusations to the main culprits here (the offending casinos and Playtech itself) instead of fannying about with a stock broker whom you know from previous experience is probably going to ignore you or at best fob you off with a "we've passed your comments on to our client" sort of response?

Do you seriously expect a broker to abort a significant IPO as a result of your communicating the fact that Playtech are perceived as dogs by a section of the playing community?

 

[caruso]

Jetset, of course not. I'm hoping they might pressurise Playtech into DOING something, not scupper the damn thing. If they simply pass the facts along with a strong recommendation, that may achieve more than anything that's been achieved so far.

Who do you think Playtech will respond to - me, or the people who'll be responsible for lining their pockets with a nine-figure sum??

You cannot deny that it's worth a shot.

 

[GrandMaster]

The brokers would only be interested if they thought that Playtech might be liable for the amounts that the casinos confiscated or failed to pay out for whatever reason and these liabilites are large enough to affect the value of the company, or if the bad customer service at certain casinos affected the future growth prospects and profitability of Playtech itself.

 

[amandajm]

Agreed, Caruso is pissing in the wind somewhat.

But, come the final report, if necissary those that care to, can rightfully write that some people are not amused by Playtech. One of those people has met up with the Playtech dispute resolution lady at the International Casino Exhibition, has written numerous warnings to players re Playtech bad licensees on various websites players frequent, including his own. Additionally, the concerned player even went as far as to protest to Seymour Peirce and sent them the due reports and reference points.

Is all good, because it can do no harm. Slight possibility of Seymour calling Playtech to task somewhat.

That said. I agree with Jetset. For I have no time for the suited brigade who ignore the player.

Playtech are worth multi millions and treat the player with contempt at times. This behaviour goes back to the Mike Craig days and has stayed fairly consistently right up to this day.

So, do your worst Caruso I say. Good for you.

 

[caruso]

Contact.

Now people, only read this if you're ready for some heavy concentration and deep thought. This is tough stuff.

I emailed the head of research at SeymourPierce. This was his response:

Who are you?

I kid you not.

 

[The Dude]

...I emailed the head of research at SeymourPierce. This was his response: Who are you?

I have no idea on how you addressed this guy, but you probably failed to properly introduce yourself. I hope it wasn't by your message board handle

 

[caruso]

You're right - beyond my name I didn't give any background info. Anyway, I immediately corrected the oversight. That said, there wasn't a lot to give, beyond my simple reasnoably long-term interest in the scene etc.

 

[spearmaster]

LMFAO...

At least you GOT a response

Imagine what the other guy must've been thinking... seeing dollar signs all over the place, and out of the blue some pissant (not that you are, but that must've been what he thought) tells him that he's daydreaming... and that he better go back to working his arse off for a living...

 

[GrandMaster]

The FT published a couple of articles on Playtech on 16 and 17 February. Caruso, you could try to get in touch with Matthew Garrahan, Leisure Industries correspondent.

 

[amandajm]

PT are valued at $8-900million.

To sort their rep out here, would be cheap in comparison.

Sportingbet have aff issues. Partypoker have aff issues and a wonderful past, spyware galore. 888 are the virtual kings of spyware. Betfair do/have use/d Spyware. The beat goes on.

I get the feeling the boards do not get listened to as much as I once thought, for the bigger boys all have bad reps.

 

[caruso]

Caruso, you could try to get in touch with Matthew Garrahan, Leisure Industries correspondent.

Already did that yesterday. However, the only way through is to send your email to the FT "help" desk and hope they forward it to the relevant journalist.

If anyone has direct contact details, please let me know.

 

[GrandMaster]

I think the print version of the FT has the authors' e-mail addresses and they are of the form firstname.lastname@ft.com . If all else fails, you could invest in a stamp and use the Royal Mail.

 

[caruso]

No need - contact established.

 

[caruso]

Any word on a date yet?

Or have the targetted institutional investors started getting cold feet with the dicey US situation?