Or-ad completed its IPO on the Neuer Market in Frankfurt last Friday, raising Euro 45 million (about $47 million) at a company value of $185 million. Or-ad issued 2.5 million shares at Euro 18 per unit, on the upper band of the Euro 14-18 price range set for the flotation.
The issue underwriter, US investment house Lehman Brothers, received a green shoe option to buy another 450,000 shares from the shareholders within 30 days.
Or-ad develops and markets virtual studio sets for television networks around the world, and its customers include companies such as ABC and Sky. Israelis had a chance to see the technology on Channel 1’s elections coverage last May and World Cup broadcasts.
Folllowing the issue, Swiss company Sporis, Or-ad’s largest shareholder, owns 26% of the company’s shares. Sporis, which sponsors international sports events, holds special strategic significance for Or-ad, which is involved also in virtual advertising.
Or-ad’s technology makes it possible to "plant" various advertisements in various languages in the course of international sports events, so that Israeli viewers see pudding ads in Hebrew and Dutch viewers watch yellow cheese ads in their own language.
Following the issue, Ormat, which is listed on the Tel Aviv Stock Exchange, has 18% stake Or-ad (down from 26% before the flotation), worth $35 million. Or-ad founders have no reason to complain either. Avi Sharir, who serves as company general manager, and Michael Tamir, who is company vice president, have each 12.2% of Or-ad’s shareholder equity, worth $23 million.
On the eve of the flotation, Or-ad received an important reserve player in the form of Intel. The world’s biggest chipmaker bought 4.7% of Or-ad’s shares for $5 million. Owing to post-issue dilution, Intel’s stake is worth $6.4 million.
Or-ad’s major competitor in the virtual television set market is Israeli company RT-Set, controlled by BVR Technologies.
Published by Israel's Business Arena November 14, 1999