Valuation and institutional support make OzForex float an IPO watershed

Roger Montgomery says OzForex’s IPO price of $2 seems to be ‘a little expensive’. Photographer Michel O Sullivan “At BT, each dealer might have 10 or 15 clients,

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Company Description

Goldman Sachs Group Inc. and Macquarie Group are acting as joint lead managers on the IPO, which will raise around million Australian dollars (US$ million), giving the listed entity a market value of A$ million, the people said.

Yet all three will completely sell out in the float, while Gilmour and Lord will trim their existing shareholdings of The participants in the IPO appear to be backing OzForex on its fundamentals rather than on any major incentivisation of its vendors. Roger Montgomery worked with Gary Lord at Bankers Trust in the s, and the funds manager has the utmost respect for him and for the global business which OzForex is building. But this flight of private capital has him feeling a little sceptical.

However the funds manager has form for picking value in floats. On the one hand, there is plenty of anecdotal demand for IPOs from investors finally emerging from their term-deposit bunkers as interest rates continue to fall. Yet as confidence returns to the equity markets, a funds manager who knows something about patience — the second-largest investor in the perpetually troubled Fairfax Media , Simon Marais from Allan Gray Australia — urges investors not to be suckered in by every smooth pitch.

Allan Gray has bought into IPOs before, and Marais says there are bargains to be had when market sentiment is down, or where a company is not well known or well followed by the broking community.

Select All Remove News. Photographer Michel O Sullivan. The 5 most influential people in property. The 5 most influential people in investment banking. How the banking royal commission is stage managed. The 5 most influential consultants in Australia in Accordingly, our management team will have broad discretion in using the net proceeds to be received by us from this offering. Chinese law may limit or prevent us from investing net proceeds in or loaning net proceeds to our PRC subsidiaries and our ability to use net proceeds from this offering in China is subject to significant uncertainty.

Technology in the markets for which we provide solutions evolves rapidly and is characterized by frequent introductions and improvements and changes in industry standards and customer requirements. Semiconductor device functionality requirements continually increase while feature size decreases, substantially increasing the complexity, cost and risk of semiconductor design and manufacturing. At the same time, our customers and potential customers continue to demand an overall lower total cost of design, which can lead to the consolidation of their purchases with one vendor.

Many of the products in which our IP is incorporated, are in the consumer electronics sector, such as mobile devices, which is a highly competitive sector. Aggressive competition in the consumer electronics markets could result in substantial declines in the license fees and royalty rates that we are able to charge our customers for our IP, as well as the number of turnkey and NRE projects that we generate.

In the past, some of our competitors have sought to increase their share of certain markets by reducing their license fees and royalty rates or the fees that they charge for their design or engineering services and may do so in the future.

We face competition from a large number of companies, including the following primary competitors: We also compete with internal engineering teams at semiconductor companies. When these companies design IP or complete designs in-house, we lose an opportunity to generate revenue in licensing and royalties, our NRE design services or turnkey products categories. We expect that as the markets for our solutions grow, new entrants will enter these markets and existing competitors may make significant investments to compete more effectively against us.

As each of these markets in which we compete become developed markets, leading semiconductor companies focusing on developed markets may increasingly enter our target markets. Our ability to compete successfully depends on factors both within and outside of our control, including: We believe we compete favorably with respect to these factors. However, many of our current and potential competitors have longer operating histories, greater name recognition, access to larger customer bases and significantly greater financial, sales and marketing, manufacturing, distribution, technical and other resources than us.

As a result, they may be able to respond more quickly to changing customer demands or to devote greater resources to the development, promotion and sales of their solutions than we can.

Our competitors may develop and introduce new solutions that have lower prices, provide superior performance, provide greater processing power or achieve greater market acceptance than our solutions. It is possible that new competitors or alliances among existing competitors could emerge and rapidly acquire significant market share, which could materially and adversely affect our business, revenue and operating results.

If we fail to compete successfully, our business would suffer and we may lose or be unable to gain market share. Company Description Our business model, which we refer to as Silicon Platform as a Service SiPaaS , is an IP-centric, platform-based, end-to-end semiconductor design service, which enables us to provide custom silicon solutions. Our mission is to mitigate the time, cost, and risks of semiconductor design and. Our business model is designed to enable the semiconductor industry to transition to a design-lite model, similar to the way in which independent wafer foundries gave rise to the fabless semiconductor industry by providing access to independent, advanced semiconductor manufacturing services.

We are a SiPaaS company that provides our customers with the ability to rapidly, efficiently and effectively bring to market custom silicon solutions that address a wide range of applications across a variety of end markets, including mobile devices, networking, the Internet of Things IoT , wearable electronics, smart homes and automotive electronics. We believe that the breadth and flexibility of our SiPaaS solution make it a compelling alternative development model designed to reduce operating expenses and improve return on investment for our customers, which include both emerging and established semiconductor companies, original equipment manufacturers OEMs , original design manufacturers ODMs and large Internet platform companies involved in the development of proprietary systems technology.

Our SiPaaS solution offers end-to-end semiconductor design services, from architectural design and physical implementation to managing the manufacturing and shipping of fully packaged and tested semiconductor devices. We originated the term SiPaaS to describe our business model, but we believe that it also describes a developing trend towards engaging third parties for the design and production of custom silicon solutions.

As of December 31, , we had 49 patents issued and five patents pending in the U. Each of our SoC platforms integrates key components of one or more of our families of IP and can be optimized for a variety of applications such as HD video, HD audio, HD voice, wireless baseband, and human user interface HUI , which includes technologies related to voice recognition, 3D motion sensing, and handwriting recognition.

We believe our manufacturing and product engineering experience makes our business scalable by being in a position to offer a wide variety of services across many different types of processes, technologies and target markets. Our manufacturing and product engineering services include test hardware and test software, rapid prototype validation, device qualification, engineering prototype to volume production, yield management, failure analysis, and quality and reliability management for SoC and system in a package SiP products.

By using these services, our customers can benefit from shortened design cycles, enhanced product performance and quality, and reduced costs.

Our SiPaaS solution is vendor neutral, positioning us to utilize a best-in-class approach for our customers for whom we can leverage our deep relationships that span the semiconductor ecosystem, including electronic design automation EDA and IP companies, wafer foundries, and packaging and testing vendors.