The IPO prospects of Israeli Internet company CommTouch improved immeasurably when Paul Allen, one of Microsoft’s founders, announced today he would buy about 10% of the company’s shares (at the planned IPO price). Through GO2NET and Vulcan Ventures, Allen will invest $20 million in the IPO, which is scheduled to be held on Wall Street tonight or tomorrow, following several delays.
Under the agreement signed with Allen, GO2NET will get a seat on CommTouch’s board of directors. With $30 billion to his credit, Allen is considered to be the world’s third richest man (after Bill Gates and Warren Buffet). CommTouch, which operates from California and Ein Vered in Israel’s Sharon region, has committed itself to developing e-mail services for GO2NET.
CommTouch has been developing e-mail solutions for Internet sites since 1998. It is expected to raise $50 million in the IPO, at company value of $200 million.
CommTouch’s largest shareholders are venture capital funds Gemini, Concord, Evergreen, Apax-Leumi, the company’s founders (Gideon Mantel, Dr. Nahum Sharfman, and Amir Lev), and a group of investors led by issue underwriter Warburg Dillon Read, which entered the company at market value of $150 million. The other underwriters are Piper Jaffray and Oppenheimer.
Published by Israel's Business Arena July 7, 1999