Israeli Gaming Firm Playtika Eyes $1 Billion American IPO

In another development, the Israeli voice networking firm AudioCodes is preparing for a $100 million sale of shares

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Playtika's offices in Herzliya.
File photo of Playtika's offices in the Tel Aviv suburb of Herzliya.Credit: Ofer Vaknin

Playtika, the mobile gaming company owned by a Chinese investor group and based in Israel, has hired investment banks to prepare for a U.S. initial public offering that could raise around $1 billion, people familiar with the matter told Reuters on Tuesday.

Playtika has hired Morgan Stanley and other banks to underwrite the IPO and is aiming to go public later this year or early in 2021, the sources said, cautioning that the timing, valuation and deal size are subject to market conditions.

Known for its casino-themed games and which also operates apps for poker and solitaire, Playtika could be valued at around $10 billion in the IPO, the sources added. They requested anonymity, citing confidentiality. Playtika and Morgan Stanley declined to comment.

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Founded in 2010 by Israelis Robert Antokol and Uri Shahak, Playtika was sold to Caesars Interactive Entertainment of the United States a year later but remained headquartered in Israel. In 2016, a group of Chinese investors including Giant Network Group and Yunfeng Capital, a private equity firm founded by Alibaba founder Jack Ma, bought Playtika from Caesars for $4.4 billion. According to its website, Playtika has 27 million monthly active users.

In related news, Israel’s AudioCodes is taking advantage of a 48% price run-up on its Nasdaq-traded shares this year to raise $100 million in a secondary offering. The company, whose market cap is at a record $1.1 billion, plans to sell 2.6 million shares and use the proceeds for ongoing capital needs and potential acquisitions. Underwriters Bank of America and Citigroup have an option to buy some 390,000 shares, or another 15%.

Founded in 1993, AudioCodes raised capital most recently in 2014, when it sold some four million shares at $8 each.

The company, which develops and sells internet-based voice networking and media-processing services, has been given a boost during the coronavirus pandemic from the growing numbers of people working from home. AudioCodes supplies video and audio services for the Microsoft Teams platform. Teams had 44 million users in March, up from just 1 million a year ago.

The U.S. IPO market has seen a significant pickup following the pandemic-induced stock market downturn, as investors place bets on newly listed companies benefiting from an expected economic recovery. Even some Chinese-owned companies continue to pursue U.S. listings, despite heightened scrutiny of their auditing standards by U.S. politicians and investors. Last month, the U.S. Senate passed a bill which, if enacted into law, would make U.S.-listed companies subject to inspection by the Public Company Accounting Oversight Board.

Playtika has also benefited from the coronavirus lockdown: Mobile gaming has surged as more consumers stay home during lockdowns aimed at curbing the COVID-19 pandemic.

Yet some Chinese IPO hopefuls face uncertainty in the wake of Luckin Coffee’s accounting issues. The Chinese coffee chain said in May that Nasdaq had notified it of plans to delist it from the exchange, a month after it disclosed that some employees had fabricated sales accounts.

Online grocery firm Dada Nexus Ltd. said Monday it aimed to raise up to $280.5 million on the Nasdaq, the first major Chinese company IPO in the United States since tensions between Washington and Beijing escalated over the future of Hong Kong and the origins of the coronavirus.

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