Israeli digital ad firm Matomy seeks London listing-Reuters

(Reuters) – Digital advertising firm Matomy Media Group said on Monday it plans an initial public offering on the main market of the London Stock Exchange with the aim of raising $100 million.

Israel-based Matomy, whose clients include American Express , AT&T and HSBC, said the share sale will give it additional capital to accelerate growth.
Matomy helps advertisers to market goods and services through its network of online publishers. It earns a fee for every transaction completed through its platform so that companies pay only for results in what is known as performance-based advertising.

The company intends to issue new shares and some of its existing shareholders, which include Viola Private Equity, plan to sell some of their holdings.
After the IPO, at least 35 percent of the company’s shares will be available to trade on the market.

“We are growing fast and we are also profitable,” Matomy Chief Executive Officer Druker said. “We find that the UK market is more suitable (than the U.S.) for our type of company.”

Matomy plans to use $19.3 million of the proceeds to raise its stake in Munich-based Team Internet AG to 70 percent from 20 percent. It will also buy the outstanding 20 percent share in its Mexican subsidiary and repay $7 million in loans.

Matomy had revenue of $193.5 million in 2013, up from $120.1 million in 2012. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $13.1 million in 2013 from $9.1 million in 2012.

Druker said Matomy was also profitable at the net level, but would not disclose details.

Team Internet had revenue of $23.3 million in 2013 and adding its results on a pro-forma basis would bring Matomy’s revenue in 2013 to $216.8 million and EBITDA to $17.2 million.

The global digital advertising market is expected to grow to $156 billion by 2016 from $88.8 billion in 2012, according to media agency ZenithOptimedia.
Performance-based advertising comprised 66 percent of total U.S. online advertising spending in 2012.

Chairman Ilan Shiloach, head of Israeli ad agency McCann Worldgroup Israel, holds a 29 percent stake in Matomy. Viola Private Equity owns 21 percent and Druker 9 percent.

Matomy’s competitors in performance-based advertising include Sweden’s TradeDoubler and Berlin-based Zanox, a joint venture between German media group Axel Springer and Swiss PubliGroupe. ValueClick in the United States is the world’s biggest player.

UBS is acting as sponsor, joint coordinator and joint bookrunner for the offer while Merrill Lynch is also joint coordinator and bookrunner. Canaccord is lead manager.