Are even large Israeli tech companies starting to see the local stock exchange as an alternative to an IPO on Wall Street? This week, fintech company Nayax has filed a draft prospectus for a bid of $ 150 million (NIS 484 million), at a pre-payment valuation expected to exceed $ 1 billion – a valuation that in the past would immediately prompt the introduction of the company abroad. The IPO includes an offer to sell from the founders of the company – brothers Yair and Amir Nechmad and David Ben-Avi – who will sell shares to the tune of NIS 194-234 million.

An interesting aspect of Nayax’s upcoming IPO is that it is structured as an international offering on the Tel Aviv Stock Exchange. The underwriters are Jefferies, along with Oppenheimer and Leader Capital Markets. Jefferies will bring foreign investors to the offer, and according to sources familiar with the matter, more than 60 meetings have so far been held with global investors, even before the roadshow.

Nayax is speaking with investors from Australia, Europe, the United States and Israel, with the aim of contacting over 100 foreign investors, and as far as we know there is a high demand. for these meetings.

This is the third offering held on the Tel Aviv Stock Exchange on an international model: Jefferies led the IPO of the exchange itself in 2019, and also led the IPO of the chain. Max Stock discount retail in 2020, two successful deals. and in which a considerable part of the shares has been sold to foreign investors.

370,000 points of sale in 50 countries

Nayax was founded in 2005 as a provider of payment solutions for vending machine operators. It then expanded its range of solutions and now offers personalized payment methods, a mobile wallet app, and more.

Nayax’s business model is based on retail subscribers who make a monthly payment for the service and payment authorization. The company says that in 2020, it authorized around half a billion transactions. It currently supports more than 370,000 points of sale and, through distributors, is active in 50 countries.

Yair Nechmad previously ran the Eden Springs mineral water company (Mei Eden). Ben-Avi is a tech entrepreneur and Amir Nechmad was a lawyer and real estate investor.

Amir Nechmad owns 31.4% of the company, fully diluted; Yair Nechmad owns 31.2%; and Ben-Avi has 30%. Fintech Safecharge, which was previously controlled by Teddy Sagi, invested $ 17.4 million in Nayax in 2018 and also bought shares from the founders, but exercised a put option to sell the shares back to all three.

In the IPO sale offer, Yair Nechmad will sell 4.9 million shares, which at the expected offer price (10-12 NIS per share) will reach 49-59 million NIS. He will be left with shares worth NIS 866 million to NIS 1.04 billion. Amir Nechmad will sell 6.5 million shares for 65-78 million NIS, and will remain with shares worth 930 million NIS to 1.1 billion NIS. Ben-Avi will sell shares for NIS 81.3-97.5 million and hold a value of $ 796-955 million.

Income growth, loss increase

Nayax employs 400 people, including 270 in Herzliya, and around 40% of its workforce is employed in research and development. According to the presentation of the company, it accepts more than 80 types of payment and 40 currencies, and it has cooperation agreements with Mastercard, Visa, PayPal, Apple Pay and other payment companies. The company sees cash usage grow from 42% of transactions in 2018 to 33% in 2023, while the vending machine market in 2025 will be almost double what it was worth in 2019, at $ 24.6 billion. of dollars.

In 2020, Nayax achieved a turnover of 78.8 million dollars, 23.8% more than in 2019. In the last two years, the company recorded an operating loss (2.2 million dollars in 2020), although it made an operating profit in 2018.

The net loss in 2020 was $ 6.1 million, compared to $ 5.5 million in 2019 and $ 3.6 million in 2018. Cash flow from regular operations, however, was positive at 6. $ 5 million in 2020, after a decline of $ 1.4 million in 2019. year, the company had cash and bank deposits amounting to $ 9.1 million.

The prospectus says that last January, the three founders and controlling shareholders signed a loan agreement with an Israeli financial institution, which loaned them $ 5 million each, $ 15 million in total, to fund the business. of the business through homeowner loans.

The principal of the loan bears annual interest of 10%. When the IPO takes place, borrowers will be required to repay it in full. The loan agreement includes a lien on 16.9 million shares of each of the borrowers, for a total of 50.6 million shares, which will be worth between 500 and 600 million NIS at the time of the IPO.

Posted by Globes, Israel Business News – fr.globes.co.il – April 29, 2021

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