Riverdeep share issue to raise up to $120m

Riverdeep, the Irish Internet education company, due to start trading on the US Nasdaq and Irish stock exchanges tomorrow, has announced it will raise around $120 million (€125.5 million) through the issue of 25 per cent of the company's share capital.

This will raise 20 per cent more for Riverdeep than originally planned after the initial price range of between $15 and $18 per American Depositary Share was revised upward to between $19 and $20. This will place an initial value on the company of around $480 million.

The share price will be announced at close of business this evening, with conditional trading among institutional investors to begin on both markets tomorrow when 36.5 million ordinary shares are issued, with each ADS representing six ordinary shares.

Institutional investors can avail of the opportunity to trade the shares until March 16th, when the shares will be made publicly available.

Company chief executive Mr Barry O'Callaghan will hold a diluted stake of just over 7 per cent valued at more than $34 million. SmartForce founder, Mr Pat McDonagh, currently holds a 66 per cent stake. This is expected to be worth an estimated $254 million after his holding has been diluted to around 53 per cent.

The Riverdeep management team and 160 employees share an 11 per cent holding, while the remaining 14 per cent is held by a number of institutions and private investors of Davy Stockbrokers. These holdings will now be valued at around $53 million and $67 million following the listing.