Riverdeep plans Irish, US listing

Riverdeep, the Irish Internet education company, has announced details of plans to take a public listing on the US Nasdaq and Irish stock exchanges on March 8th. It will be the first time an Irish company has taken a simultaneous listing on both exchanges.

Riverdeep, which is 66 per cent owned by Smartforce (formerly CBT) founder Mr Pat McDonagh, plans to raise around $100 million (€99.6 million) through an initial offer of 36.5 million new ordinary shares, accounting for 25 per cent of the company's share capital after the offering.

It will then be valued somewhere between $400 million and $500 million based on the ordinary share price range indicated by the Irish Stock Exchange and US Securities and Exchange Commission (SEC).

In the US, the shares are expected to start trading at between $15 and $18 per American Depository Share (ADS), with each ADS representing six ordinary shares. The equivalent price range per ordinary share on the Irish Stock Exchange will be between €2.49 and €2.98. Company chief executive Mr Barry O'Callaghan, who joined Riverdeep a year ago, will hold a diluted stake of just over 7 per cent valued at more than $30 million. Mr McDonagh, a former primary school teacher, will own shares worth around $238 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, who bought 14 per cent of the company last October for $15 million. These holdings will be valued at around $50 million and $63 million following the listing.

Credit Suisse First Boston, Donaldson Lufkin and Jenrette, Davy Stockbrokers and Wit Soundview have been appointed underwriters to the transaction.

Riverdeep is located in Dublin, where much of its software development takes place, and in Cambridge, Massachusetts. Half of its employees are US based, with a company sales operation spread throughout the US.

There is expected to be strong demand for the stock from Irish institutions, but little opportunity for retail investors to avail of the initial offering.