Another interesting Tech IPO on the pipeline.. The company itself does not develop software / hardware.. It produces specialised multi-lingual dataset to help with machine learning (AI).
Appen is a language technology and data solutions provider that has capabilities in more than 140 languages. Appen offers large training data, linguistic models, and consulting services to assist leading technology companies and government agencies in:
· development of internet and mobile connected products including:
· search relevance optimisation
· development of speech recognition or speech synthesisers and other linguistic products
· security and intelligence
Appen has two operating divisions:
· Content Relevance: Provides smart data to increase online discovery and search relevance of global search engines and e-commerce and social media platforms; and
· Speech and Data Collection: Provides training data for speech-recognition technologies in devices such as mobile phones, computer games and TV consoles.
Appen was established in 1996 and has a long track record of revenue growth and strong margins. The company currently has circa 150 staff across offices in Australia, the US and the Philippines. Appen is also able to leverage around 150,000 native speakers and in-country cultural experts across the globe.
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Transaction
An Offer of approximately 78.7 million Shares to raise approximately $39.4 million (the “IPO” or the “Offer”)
1
Offer Price
$0.50 per Share
2
Market Cap at the Offer Price
$62.1 million
3
Enterprise Value
$54.6 million
4
Use of funds
$21.3m is being paid to the Existing Owners
Proceeds received by Appen for the issue of shares under the Offer will be used by Appen for the repayment of debt ($4.7m), settlement of the contingent consideration ($2.2m), buy-back of options issued as part of the Butler Hill acquisition ($7.3m) and buy-back of management options ($0.8m)
Post completion of the Offer, Existing Owners will own approximately 36.6% of Appen which will be held in escrow until the release of the FY 2015 results (CY)
