Outbrain sets terms for Nasdaq IPO

Outbrain co-CEOs Yaron Galai and David Kostner Photo: Noam Galai
Outbrain co-CEOs Yaron Galai and David Kostner Photo: Noam Galai

The Israeli content recommendation company is seeking a slightly lower than expected valuation.

Israeli content recommendation company Outbrain has announced that it has set the terms for its IPO on Nasdaq. The company has reported that it will issue eight million shares at $24-$26 per share for a raise of $192-$208 million. Outbrain has also published preliminary results for the second quarter of 2021, which showed a major jump in net profit.

The underwriters have also been given 30 days to exercise options to buy shares worth $28.8-$31.2 million within 30 days at the IPO price.

The IPO will thus be at a company valuation of between $1.3 billion and $1.4 billion, slightly lower than previously expected.

In the second quarter of 2021, Outbrain expects revenue of $243-$247 million, up 55% from $158 million in the corresponding quarter of 2020. Net profit in the second quarter is $13.6-$15.2 million compared with $2.6 million in the corresponding quarter of 2020.

In the first quarter of 2021 the company reported revenue of $228 million, up from $177 million in the corresponding quarter of 2020. Outbrain also swung from a loss to a $10.7 million net profit in the first quarter of 2021.

Last week, Outbrain raised $200 million from Seth Klarman's hedge fund Baupost, at an unreported valuation. The company's previous financing round before that was in 2016 at a company valuation of $650 million. Baupost has told Outbrain that it now intends buying 9.9% of the shares being issued, which will be for about $20 million, although it has no binding contract to do so.

Outbrain's other shareholders include Lightspeed, Viola, Gemini, Index Ventures, Gruner + Jahr, and founder and co-CEO Yaron Galai who holds a 7.8% stake, which will be worth about $88 million after the IPO. Co-CEO David Kostman holds share worth about $29 million.

CitiGroup, Jefferies, Barclays, JMP Securities, Evercore Group, Needham and LUMA Securities are acting as underwriters.

Published by Globes, Israel business news - en.globes.co.il - on July 14, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Outbrain co-CEOs Yaron Galai and David Kostner Photo: Noam Galai
Outbrain co-CEOs Yaron Galai and David Kostner Photo: Noam Galai
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