Inside Raises €69 million in Initial Public Offering
Inside Secure today announced it has raised €69 million (US$90 million) in its initial public offering, pricing its shares at €8.30 ($10.82) apiece.
The France-based NFC chip supplier, which is listing on the NYSE Euronext Paris, noted the price is near the top of the range of €7 to €8.54, which it set when it announced Feb. 7 that it would relaunch its IPO. The shares will begin trading Monday. UPDATE: The company's shares closed up from the IPO price to €9.20 at the end of the first day of trading Monday. END UPDATE.
Inside, which said its shares were oversubscribed by more than five times, said it might raise up to €10.3 million more in the IPO. That would bring its IPO to a total of just under €79.3 million, or nearly one-third of its share capital.
Inside CEO Rémy de Tonnac said in a statement today that the “strong demand” for Inside’s shares demonstrated by the IPO “illustrates the confidence of investors in our business model, our strategy and the outlook for the growth.”
Inside said it went public to strengthen its balance sheet and help fund high research and development costs, as well as increasing its market profile.
The vendor is believed to be one of only two companies, along with NXP Semiconductors, that have shipped chips in NFC phones now on the market outside of China. But much larger companies are planning to introduce NFC chips, including Samsung Semiconductor, Texas Instruments and Broadcom.
Inside said it shipped just under 17.5 million NFC chips in 2011 and brought in $46.9 million in NFC revenue for the year. It said it shipped 10 million NFC chips in the three months ending January 2012.
Research In Motion has bought nearly all of Inside’s NFC chips to date for RIM’s NFC-enabled BlackBerry models.
But Inside also announced earlier this month a design win with a “leading mobile phone manufacturer,” on one of the most “widely used mobile operating systems.” It declined to name the phone maker or operating system, though the platform is either Windows Phone or Android.
Inside in December also has announced a five-year, nonexclusive, licensing deal for its NFC technology with U.S.-based Intel Corp., which plans to introduce combo wireless chips incorporating NFC, Inside has said.
But Inside to date has been unable to break NXP’s dominance of NFC business with Android device makers. NXP disclosed last week it had design wins for 130 NFC handsets and tablets, many, if not most, of them Android devices. CEO Richard Clemmer contends this gives NXP an “Intel-like” market share in terms of design wins.
Inside reported it had a net loss of $11.3 million for the first nine months of 2011, compared with a loss of nearly $8 million for all of 2010.
The vendor blamed the losses on high research and development costs, which went mainly for NFC technology. R&D spending totaled $24.8 million or 22.5% of sales for the first nine months of 2011, Inside reported.
The need to outsource secure elements to Germany-based Infineon Technologies also hurt profitability, noted Inside. About 95% of the NFC chips Inside has shipped come stacked with Infineon’s embedded secure elements.
Inside, which in 2010 bought the smart card chip business of U.S.-based Atmel, said it plans to produce its own embedded secure element by the end of 2012, though could continue to use Infineon chips in some cases.