Angry Birds creator’s IPO falls short of soaring rumours
Following several tough years of recovery, Rovio aims to boost growth and take part in gaming-industry consolidation
Finnish mobile games maker
Rovio Entertainment Ltd. set a price range on Friday for its planned listing that would value the maker of the game Angry
Birds at up to $1.1-billion (U.S.), well below potential values cited in media reports.
The company, whose business is recovering after a tough couple of years, announced its longawaited initial public offering this month, saying it was aiming to boost growth and to take part in gaming-industry consolidation.
Initial media reports had said the company could be valued at up to $2-billion in the flotation, though analysts had already questioned whether that could really be achieved.
The preliminary price range of €10.25 ($14.93 Canadian) to €11.50 a share announced on Friday would give Rovio a market value of €802-million to €896-million.
“If it had been as rumoured, it would have been way too high,” said analyst Atte Riikola from Helsinki-based equity research firm Inderes.
“Looking at sales, the valuation pits Rovio at the same level as its peers, but includes profit growth expectations.”
Rovio, whose games have been downloaded 3.7 billion times, grew rapidly after the original
Angry Birds game was launched in 2009.
But Rovio was slow to respond to a shift to freely available mobile games that make revenue from in-game purchases. Its business quickly declined as rival games such as Supercell’s Clash of Clans and King’s Candy Crush Saga took over. Rovio booked an operating loss and cut a third of its staff in 2015. However, sales are now recovering on the back of the 2016 release of 3-D movie Angry Birds, as well as new games.
The company expects to sell about 55 per cent of its shares in the flotation, raising €438-million to €488-million.
Only €30-million would go into Rovio’s coffers, with most going to its major owners, including Trema International and venturecapital firms Accel Partners and Atomico.
Trema, which is owned by Kaj Hed, the uncle of Rovio co-founder Niklas Hed, is expected to keep a stake of 37 per cent after the listing, down from 69 per cent now, Rovio said.
The subscription period starts on Sept. 18 with trading expected to be on the Helsinki bourse’s pre-list on Sept. 29 and on the main list on Oct. 3.
Sales of Rovio’s Angry Birds game are now recovering on the back of the 2016 release of the 3-D movie of the same name.