Spokesman reports IPO coming due "within the month"

News was coming in thick and fast as the week came to an end, concerning what is likely to be one of this year’s biggest online gaming listings on the London AIM, with a Playtech spokesman announcing plans to float $300 million in shares in a public offering which now sets the value of the company at $950 million.

The Financial Times, earlier this week reported that an IPO was for sure, and Playtech made this official early this (Friday) morning.

The company, which is based in British Virgin Islands will probably list the shares by the end of the month, according to a spokesman. The spokesman also said that Teddy Sagi will lead a group of shareholders that owns more than half of the business that he helped establish.

Designer, developer and licensor of software for Internet gaming companies including GoldenPalace.com and Empire Online Ltd., Playtech, helps online Internet companies to attract players to gambling Web sites. The company has 37 licensees operating in 16 online poker rooms, 89 online casinos, and 14 bingo sites.

Playtech was founded in 1999, and in 2005 reported an after-tax profit of $35.6 million as compared with its after-tax profit of $8.2 million in 2003, the company said in the statement. During a two year period their sales quadrupled to $47.6 million.

Toronto, Canada-based CryptoLogic Inc., is a Playtech competitor. That company has a market value of C$379.8 million or US$329 million.

The company's management is based on the Isle of Man, but 90 percent of its workers are located in Estonia. The company maintains a close association with the University of Tartu, which is located in the southern part of Estonia. According to a company spokesperson, Playtech recruits its graduates as software developers.

According to the Israeli press late last year which included some interesting inside detail, Playtech was founded in 2000 by Sagi controlled NAV New Age Investments Ltd., and three entrepreneurs from central Israel who are in their thirties. Current Playtech VP marketing incumbent Elad Cohen served as the CEO. In 2003, NAV was removed from the Tel Aviv Stock Exchange (TASE).

Amnon Ben-Zion and CEO Rami Beinish are said to be the other two founders. Cohen and Ben-Zion first met during their military service in the central processing unit of the Israeli Defense Force. Ben-Zion sold his Playtech interests 12 months ago.

The Israeli news article reports that a valuation of the company was made for NAV in late 2002. It found that NAV was the owner of 68 percent of the company, Elad Cohen owned 19 percent, and the other two founders respectively 6 and 7 percent. After deducting debts, at that time Playtech was valued at $18.4 million. Today that figure seems unlikely. The valuation was performed in a failed attempt by Sagi to find capital for the company through issuing 10 percent of its capital to an outside investor. According to the valuation Playtech revenue in 2002 was said to be $4.5 million with an operating profit before financing costs of $1.5 million.

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