Angry Birds' Maker Rovio Sets Pricing for $1 Billion IPO - IPO

By Nathan Allen Features Dow Jones Newswires

Rovio Entertainment Oy, the company behind the "Angry Birds" mobile gaming franchise, confirmed Friday the pricing for its initial public offering, which will value the company at about $1 billion.

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The Finnish company said it would offer shares within a range of EUR10.25 ($12.22) to EUR11.50, giving it a market capitalization of between EUR802 million and EUR896 million.

The range would value Rovio at roughly three times its annual revenue, on a par with similar companies, a person involved in the IPO said. When the company announced plans to float earlier this month, shareholders hoped the IPO would value the company at about EUR2 billion, people familiar with the matter said at the time. "This number wasn't realistic, " the person said.

When China's Tencent Holdings Ltd. bought Supercell Oy, last year, it valued the Finnish mobile-game maker at more than $10 billion, or 4.3 times its 2015 revenue.

"It set a ceiling because Supercell is the best monetizing game company, " said Tero Kuittinen, strategist at Finnish software developer Kuuhuub Oy.

A valuation in the range of EUR2 billion could have been doable three or four years ago, but given more recent performance in the sector was "really way too high," said Atte Riikola, an analyst for Inderes, a Helsinki-based research firm. Mr. Riikola added that he thought the pricing for the IPO is now "quite fair compared to other gaming companies."

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The IPO will raise gross proceeds of about EUR30 million and allow existing shareholders, including majority owner Kaj Hed, the uncle of Rovio co-founder Niklas Hed, to sell shares.

Rovio, which has videogame and brand licensing, says the listing will help it pursue its growth strategy, including through acquisitions, and gain more flexibility to remunerate its employees.

It expects to begin trading on the Nasdaq Helsinki pre-list on September 29 and on the official list around October 3, under the code ROVIO.

Struggling to repeat the success of its Angry Birds franchise, Rovio has gone through several cost-cutting rounds and management changes in recent years.

For the first six months of the year, the company reported a 94% rise in revenue to EUR152.6 million. Earnings before interest, taxes, depreciation, and amortization, or Ebitda rose to EUR39.9 million from EUR11 million a year earlier.

--Sam Schechner and David Gauthier-Villars contributed to this article.

(END) Dow Jones Newswires

September 15, 2017 11:19 ET (15:19 GMT)