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The Semi-Annual Financial Conference
The Association of Publicly Traded Companies and DC Finance
Ronit Harel Ben-Ze’ev, Senior Vice President
Tel-Aviv Stock Exchange
November 2006
Going Public –Where and When
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TASE – No. of New Companies(Equity raised in NIS millions)
1-9/2006
2005
2004
13
(355)
7
(349)
--
R&D and Hi-Techcompanies
8
(259)
5
(179)
--
Biomed
(Out of the above)
13
(1,594)
17
(2,021)
20
(1,661)
Other Companies
26
(1,949)
24
(2,370)
20
(1,661)
Total
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The Home Market – 2 Alternatives:
1.IPO on the TASE
2.Dual Listing on the TASE – Following an IPO onU.S. Markets or LSE (official list).
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1. IPO on the TASE
•A leverage towards an offering abroad.
•Timing – raise when you can (exiting in stages)
•Low costs and a quick process.
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IPO Costs(1) ($k)IPO Costs(1) ($k)
Fixed costs (2)
1,475
1,365
155
Variable costs:
Underwriting, distribution
3,500
2,500
2,500
Total
4,975
3,865
2,655
(1) $ 50 mil offering
(2) , Lawyers, CPA, printing, fees, PR, etc.
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Annual Costs ($k)Annual Costs ($k)
General costs (2)
1,800
822
260
D&O insurance
250
50-60
20
Class actions (estimate)
250
--
--
Total
2,300 ~
~900
280
(1) Source: canaccordAsams, June, 2006
(2) Lawyers, CPA, IR, PR, fees, shareholders meetings, payments and options for directors
(2)
(2)
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•A jumping board to offering abroad.
•Timing – raise when you can (exiting in stages)
•Low costs and a quick process.
•Special rules for R&D companies.
1. IPO on the TASE
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Special rules for R&D companies*
•Post-IPO equity: At least NIS 8 million
•Minimal distribution of public float: 35 shareholders
•Public float:
The public float (percent)must be at least
When the value of thepublic float is…
10.0
From 16
7.5
From 50
•R&D company: one that has invested at least NIS 3 millionin R&D in the last three years, including funds raised fromthe Chief Scientist.
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Listing Procedures(excluding R&D companies)
Procedure 3
Procedure 2
Procedure 1
--
35
25
Shareholders' equityafter listing
80
30
20
Public-float value
--
12 months
12 months
Period of activity
--
--
4
Added value in the 12months precedinglisting
80
--
--
Value of issue
200
--
--
Value of thecompany's shares
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•A jumping board to offering abroad.
•Timing – raise when you can (exiting in stages)
•Low costs and a quick process.
•Special rules for R&D companies.
•Tel-Tech Index, Bio-Med (in process) and other TASEindices
•Dual listing law – following listing on U.S markets.
1. IPO on the TASE
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36 Israeli companies have dual-listed on the TASE since thedual-listing law was enacted
–2 companies, Partner and Perrigo, are included in the TA-25Index
–9 companies are included in the Tel-Tech 15 Index
–14 companies are included in the TA-100 index
12 additional companies are traded both in Tel Aviv and theU.S.
2. Dual Listing
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•More Israeli•More Israeli investors - institutional and individual.
•Index funds (TA 25, TA 100 and Tel-Tech funds).
•TA-25 companies may benefit from trading in index-options.
•Raising money on TASE (Partner).
•The home market benefit
–Blue-chip prominence on the TASE
–Greater familiarity and exposure
•13-hour continuous trading from 10:00 a.m. to 11:00 p.m., localtime
•Options can be exercised by employees easily and at low cost
The Benefits of Dual Listing
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Some Figures
MarketCapitalization(Millions of Shekels)
September 30,2006
Portion of TASETrading Volume
1-9/2006
Average DailyTrading Volume onTASE – 1-9/2006
(Thousands of Shekels)
Perrigo 3/2005
6,951
29%
7,458
Partner Communication 7/2001
6,567
88%
13,777
Given Imaging 3/2004
2,272
24%
1,922
Blue Square Israel 11/2000
1,982
93%
1,214
Alvarion 7/2001
1,663
16%
2,132
AudioCodes 10/2001
1,643
20%
1,954
Radware 5/2004
1,158
14%
1,174
Aladdin 7/2004
1,072
20%
1,129
Shamir Optical 5/2005
663
41%
250
XTL (London) 7/2005
228
63%
844