Mobileye sets minimum value of $2.7 billion in IPO
Company that develops crash warning system outlines terms to insider shareholders ahead of Wall Street sale.
The much-anticipated initial public offering of the technology company Mobileye, which develops a collision warning system for drivers, will value the company at a minimum of $2.7 billion, according to a statement released by one of its publicly traded shareholders Monterday.
Delek Auto, which owns 2.3% of Mobileye, said the company planned to sell shares in New York at a minimum price of $64.45 each. It received the information in a proposal to existing shareholders who might be interested in selling their stock as part of the offering.
In fact, the $2.7 billion valuation will be exceeded in the actual IPO. The prices Delek Auto and other shareholders were informed of are the minimum per-share prices the company is hoping to reach. More likely it will sell shares in the IPO at a $3 billion valuation or more.
Early assessments were that the IPO would be based on a company valuation of $3.5 billion to $5 billion. Goldman Sachs and Morgan Stanley are leading the offering. The company intends to list its common stock on the New York Stock Exchange.
Mobileye, which filed a draft prospectus for the IPO a week and a half ago, aims to raise $100 million in a sale of new stock. Its existing shareholders are expected to sell another $500 million of their shares.
Delek, which is traded on the Tel Aviv Stock Exchange, said that if it opted to sell its entire holding, it would register a pre-tax gain of 95 million shekels ($27.7 million).
Mobileye, which uses a coordinated package of software and cameras to help cars avoid collisions, has built its valuation on the assumption it will show a large and steady improvement in its revenue and profitability in coming years, as it signs contracts with the world’s leading automakers. The company has been helped by European regulations that will enable it to offer its technology in mid-market cars.
The company’s low-cost technology is built around a single camera installed between the vehicle’s rearview mirror and the windshield. The device contains a processor capable of identifying other vehicles, pedestrians and cyclists, and warns drivers when it detects the risk of collision.
Founded in 1999 by chairman of the board Amnon Shashua, a professor of computer science at the Hebrew University of Jerusalem, and businessman Ziv Aviram, Mobileye’s CEO, the company saw its 2013 revenues reach $81.2 million – double their 2012 level and four times what it brought in the year before.
Mobileye reported an operating profit of $15.2 million last year, turning around from an operating loss of about $1.7 million in 2012 and $11.7 million the year before that. The company earned its first net profit — $20 million — last year, following a loss of $53 million in 2012 and $13 million in 2011. However, on a non-GAP basis, profit was lower $33 million last year, rising from $18 million in 2012 and a loss of $12.3 million in 2011.
Shashua and Aviram each own 9.3% of the company. One of the bigger shareholders, which could profit enormously, is Bank Leumi, which bought a stake in the company in 2008 for $60 million. It has since sold some of its shares but retains a 3% holding.
Other Israeli shareholders in Mobileye include the auto importer Colmobil, property developer Lev Leviev and a host of Israeli institutional investors, such as the insurance companies Migdal, Menorah and Clal, each of which own between 1% and 2% of the company.
Mobileye is incorporated in the Netherlands but operates a development center in Jerusalem’s Har Hotzvim industrial park, where the firm has a staff of about 200 engineers.
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