Teddy Sagi floating SafeCharge on AIM

The online clearing solutions company will reportedly try to raise $100 million in London.

Teddy Sagi, the controlling shareholder in online gaming software solutions developer Playtech Cyprus Ltd. (LSE:PTEC), has again revealed another source of his fortune, and unsurprisingly he has done it through an offering on the British capital market. This comes a few days after a $500 million offer to sell in Playtech.

What is the new company that is about to become public? Its name is SafeCharge Ltd., which today announced that it plans an IPO on London’s Alternative Investment Market (AIM). The company did not disclose how many shares it will offer, or the price, but it will reportedly raise $100 million at a company value of £210-230 million, after money ($351-385 million, with a midpoint of $368 million).

Sagi is floating SafeCharge when he owns 90% of the company (similar to his stake in Playtech before its IPO), which means that he is the company's largest, and possibly sole, source of financing. The remaining 10% of company is held by founder and CEO David Avgi. His stake, before the IPO, is worth $27 million.

Sagi's stake in SafeCharge will fall to 63% after the IPO, and Avgi's stake will fall to 7%. The company's float will be 30%. The IPO will not include an offer to sell, but only the raising of capital by the company.

SafeCharge, which has been in business for eight years, provides online clearing and antifraud solutions, including for gaming sites. Under the slogan "SafeCharge -Securing your Profitability", the company says on its homepage that it provides e-commerce merchants "with a fully-integrated risk management platform that accurately recognizes and minimizes potential online risks, while at the same time increasing profits."

SafeCharge will use the proceeds from the IPO - which are quite substantial - to invest in the acquisition of companies that are synergetic to its business and to launch a digital wallet for online gamblers and online foreign exchange traders.

SafeCharge says that it processed $5 billion in transactions in 2013, a figure that illustrates its dominance in this industry. It posted $43.1 million revenue in 2013, 31.4% more than in 2012, and had earnings before interest, taxes, depreciation and amortization (EBITDA) of $11.2 million, giving an EBIDTA margin of 26%.

According to UK investment bank Shore Capital, which will underwrite the offering, SafeCharge expects $61.2 million revenue in 2014 (42% annual growth), and EBITDA of $18.1 million. This means that the company expects an EBITDA multiple of 20 in 2014, a respectable multiple that is apparently due to the unceasing rally in the capital markets.

Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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