‘Angry Birds’ Maker Rovio Disappoints With IPO Pricing

‘Angry Birds’ Maker Rovio Disappoints With IPO Pricing

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‘Angry Birds’ Maker Rovio Disappoints With IPO Pricing

‘Angry Birds’ Maker Rovio Disappoints With IPO Pricing

Rovio Entertainment Oy, the company behind the “Angry Birds” mobile-gaming franchise, on Friday set the pricing for its initial public offering, valuing the company at about $1 billion—well short of shareholders’ more-optimistic forecasts. The Finnish company said it would offer shares within a range of €10.25 to €11.50 ($12.26 to $13.76), giving it a market capitalization of between €802 million and €896 million. The range would value Rovio at roughly three times its annual revenue, on par with similar companies, a person involved in the IPO said. When Rovio earlier this month announced plans to float, shareholders hoped the IPO would value the company at about €2 billion, people familiar with the matter said at the time. “This number wasn’t realistic,” the person said.

The range would value Rovio at roughly three times its annual revenue, on par with similar companies, a person involved in the IPO said. When Rovio earlier this month announced plans to float, shareholders hoped the IPO would value the company at about €2 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 Kuuhubb Oy.

A valuation in the range of €2 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 IPO pricing is now “quite fair” compared with other gaming companies.

The IPO will raise gross proceeds of about €30 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 prelist on Sept. 29 and on the official list around Oct. 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 €152.6 million. Earnings before interest, taxes, depreciation, and amortization, or Ebitda, rose to €39.9 million from €11 million a year earlier.

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


An ''Angry Birds” balloon during the Macy's Thanksgiving Day Parade in New York last year.
An ''Angry Birds” balloon during the Macy's Thanksgiving Day Parade in New York last year.

Rovio Entertainment Oy, the company behind the “Angry Birds” mobile-gaming franchise, on Friday set the pricing for its initial public offering, valuing the company at about $1 billion—well short of shareholders’ more-optimistic forecasts.

The Finnish company said it would offer shares within a range of €10.25 to €11.50 ($12.26 to $13.76), giving it a market capitalization of between €802 million and €896 million.

The range would value Rovio at roughly three times its annual revenue, on par with similar companies, a person involved in the IPO said. When Rovio earlier this month announced plans to float, shareholders hoped the IPO would value the company at about €2 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 Kuuhubb Oy.

A valuation in the range of €2 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 IPO pricing is now “quite fair” compared with other gaming companies.

The IPO will raise gross proceeds of about €30 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 prelist on Sept. 29 and on the official list around Oct. 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 €152.6 million. Earnings before interest, taxes, depreciation, and amortization, or Ebitda, rose to €39.9 million from €11 million a year earlier.

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



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