One year after its first attempt at going public, Israeli Internet provider NetVision is finally headed for its IPO. Last Thursday, the company submitted its draft prospectus for raising NIS 150 million to the Israel Securities Authority, Estimates are that the issue will be at a company value of NIS 280 million, and will also include an offer for sale by the IDB group, NetVision’s controlling shareholder. The issue is slated for May, and NetVision deputy CEO Avi Zvi says that the goal of the issue is primarily to strengthen the company’s capital structure.
NetVision’s first effort at becoming a public company took place last May. It planned to raise NIS 130 million by selling stocks and bonds, at a company value of $60-70 million. The plan failed, mostly because of disagreements between the controlling shareholders and the underwriters over the company value for the issue.
NetVision is believed to be Israel’s second largest Internet provider, after Bezeq International, but ahead of Internet Gold (Nasdaq: IGLD; TASE: IGLD). Both Elron Electronic Industries (Nasdaq: ELRN; TASE: ELRN) and Discount Investment Corporation (TASE: DISI), Elron’s controlling shareholder, own 46% of the company. NetVision’s revenue grew 7.6% to $70.5 million (NIS 304 million) in 2004, and its operating profit jumped 47% to $7.3 million. The company earned a $4.3 million net profit (NIS 18.7 million) in 2004, compared with $1 million in 2003.
At the end of 2004, NetVision had 411,000 subscribers, of which 225,000 were high-speed Internet subscribers, compared with 357,000 subscribers and 146,000 high-speed Internet subscribers at the end of 2003. This means that the company recruited 54,000 subscribers in 2004, and 79,000 high-speed Internet subscribers.
NetVision currently has an equity deficit of $5.2 million (NIS 22 million), and total assets of $67.4 million. In order to meet the threshold terms for an issue, Elron and Discount Investment are likely to inject capital into the company it increase its equity to the NIS 4 million minimum.
Published by Globes [online], Israel business news - www.globes.co.il - on April 11, 2005