Israeli Internet company CommTouch, which specializes in developing email products over the network, has submitted to the US Securities Exchange a "quiet" prospectus, in advance of its Wall Street issue. The prospectus is likely to be disclosed to the public within a few days.
The issue price has not yet been determined, but it is expected to reflect a company value of $300 million. It therefore emerges that CommTouch, which has not yet posted significant revenues from its activities, will raise $50-$70 million for 20% of its shares.
A quiet prospectus is a preliminary stage protecting the issuer from exposing issue figures, thereby allowing him a breathing margin of several weeks. Such a prospectus also enables details to be changed, or withdrawal of the prospectus without the public’s knowledge.
ComTouch’s underwriters in the issue are US bank Jeffrey Pfeffer, Warbourg-Dylan-Read and Prudential. Last month, the company held a private placement with a group of investors Warbourg organized, raising $14 million on the basis of a company value of $150 million before money. The private placement was apparently intended to "enhance" the financial figures in the issue.
The largest shareholders in ComTouch are the Evergreen fund, with 16% of company shares, via investment and venture capital funds, and Leumi venture capital fund Apex, Gemini and Concord, which have 10% each. The company’s three founders, general manager Gideon Mantel, Dr. Nahum Sharfman and Amir Lev, hold 20% of the equity together.
Only three months ago, CommTouch held private placement which reflected a company value of only $30 million. The company raised $8 million from venture capital funds Concord, Yozma, Challenge and Japco of Japan. Their investment improved ten fold in this placement!
CommTouch employs sixty workers in its two branches (Ein Vered and California). Isabel Maxwell, daughter of the late media tycoon Robert Maxwell, is president of the company founded in 1991. In the past, Isabel Maxwell headed a company which developed the Internet search engine Megellan, sold to Excite in 1996.
Published by Israel's Business Arena May 4, 1999