Jefferies leads Nayax’s $ 1 billion IPO in TASE

Are even the big Israeli tech companies starting to view the local stock exchange as an alternative to a Wall Street IPO? This week, fintech firm Nayax submitted a draft prospectus for an offer of $ 150 million (NIS 484 million), with a pre-valuation of the funds expected to be more than $ 1 billion – a valuation that in the past would have paid directly to the company float abroad. The placement includes an offer to sell by the company’s founders – brothers Yair, Amir Nashd, and David Ben-Avi – who will sell shares worth 194-234 million shekels. An interesting aspect of the upcoming Nayax IPO is that it is organized as an international offering on the Tel Aviv Stock Exchange. The insurers are Jefferies, with Oppenheimer and Leader Capital Markets. Jefferies will bring foreign investors to the show, and according to sources familiar with the matter, more than 60 meetings have been arranged so far with global investors, even before the promotional campaign. Nayax talks to investors from Australia, Europe, the United States and Israel. The aim is to contact more than 100 foreign investors, and as far as is known, there is a great demand for these meetings. This is the third offer to be held at the Tel Aviv Stock Exchange on an international model: Jefferies led the float of the exchange itself in 2019, and also led the introduction of the discounted retail chain Max Stock in 2020, two bids that were successful in which a large portion of the shares were sold to investors Aliens. 370,000 POS in 50 Countries Nayax was founded in 2005 as a payment solution provider to automated vending machine operators. It later expanded its solutions and now offers custom payment methods, a mobile wallet app, and more. Nayax’s business model is based on retail subscribers making a monthly payment for service and payment clearance. The company says that in 2020 it liquidated nearly half a billion transactions. It currently supports more than 370,000 points of sale, and is active through distributors in 50 countries. Yair Nishmad previously ran the Eden Springs Mineral Water Company (Mei Eden). Ben Avi is a tech entrepreneur, and Amir Nishmad was a lawyer and real estate investor. Amir Nishmad owns 31.4% of the company, fully diluted; Yair Nishmad owns 31.2%. And Ben Avi holds 30%. Controlled by Teddy Sagi, Fintech Safecharge invested $ 17.4 million in Nayax in 2018 and also bought shares from the founders, but exercised an option to sell to resell the shares to the three. In the offer to sell within the framework of the IPO, Yair Nashmad will sell 4.9 million shares, at the expected offering price (10-12 shekels per share), which will bring in 49-59 million shekels. It will remain with shares valued at 866 million – 1.04 billion shekels. Amir Nashmad will sell 6.5 million shares for 65-78 million shekels, and there will be shares of 930 million – 1.1 billion shekels. Bin Avi will sell the shares for 81.3-97.5 million shekels, and he will remain in possession of 796-955 million shekels. Increase in revenue, higher loss, Nayax employs 400 people, 270 of whom are in Herzliya, and about 40% of its workforce is engaged in research and development. According to the company’s offer, it accepts more than 80 types of payment and 40 currencies, and has cooperation agreements with Mastercard, Visa, PayPal, Apple Pay and other payment companies. The company sees cash use falling from 42% of transactions in 2018 to 33% in 2023, while the vending machine market in 2025 will nearly double its value in 2019, at $ 24.6 billion. In 2020, Nayax generated revenue of $ 78.8 million, up 23.8% from 2019. In the past two years, the company recorded an operating loss ($ 2.2 million in 2020), even though it made an operating profit in 2018. Net loss in 2020 is $ 6.1 million, up from $ 5.5 million in 2019 and $ 3.6 million in 2018. However, cash flow from normal activity was positive at $ 6.5 million in 2020, down from $ 1.4 million in 2019. At the end of last year, The company had $ 9.1 million in bank and cash deposits. The bulletin stated that the three founders and the controlling shareholders signed, last January, a loan agreement with an Israeli financial institution, which loaned them $ 5 million each, $ 15 million in total, to finance the company’s activities through owners’ loans. The principal bears an annual interest of 10%. When floatation occurs, borrowers will have to pay it off in full. The loan agreement includes a concession of 16.9 million shares for each of the borrowers, or 50.6 million shares in total, which will be worth 500-600 million shekels in the IPO. Posted by Globes, Israel business news – en.globes.co.il – April 29, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021