Poland’s Biggest Web Portal Seeks Up to 100 Million Zloty in IPO

Wirtualna Polska Holding SA, the owner of Poland’s largest web portal, started an initial public offering to raise funds for acquisitions and debt repayment.

The company is selling as many as 8.97 million new shares to raise 100 million zloty ($26 million) and its majority owner European Media Holding Sarl, controlled by Innova Capital Sp. z o.o., offers a further 5.85 million shares, Wirtualna said in an IPO prospectus on Tuesday. The maximum price was set at 37 zloty apiece.

Poland’s IPO market has livened up in past weeks as stock valuations climbed on the Warsaw exchange and interest rates fell to record lows. Billionaire Leszek Czarnecki’s Idea Bank SA held a 254.2 million-zloty IPO and MCI Management SA offered a stake in its asset-management unit Private Equity Managers SA last month. Property developer Atal SA in March announced plans to sell shares to the public in Warsaw, while German car-parts manufacturer Uniwheels AG began a $142 million IPO on Monday.

“Competitors are breathing down our neck and we want to use the IPO money for acquisitions,” Wirtualna Chief Executive Officer Jacek Swiderski said at a news conference in Warsaw. “We want to keep investing in e-commerce, which expands twice as fast as the Internet advertising market.”

The company may sell fewer new shares than the upper limit of 8.97 million to adjust the proceeds to its 100 million-zloty goal. European Media won’t change its stake on sale regardless of the final price and the total value of the offering won’t exceed 320 million zloty, Jacek Radziwilski of Pekao Investment Banking SA, an IPO manager, said at the conference.

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Wirtualna, established in 1995 as Poland’s first Internet portal, wants to expand into e-commerce and financial products distribution, according to the statement. Its portals including its flagship Wp.pl had 4.1 billion page views in December and 15.6 million of users, according to data from research company Megapanel PBI/Gemius. Its biggest competitor is Onet.pl, bought by Ringier Axel Springer Media AG in 2012.

“Our advantage over Onet isn’t big and that’s why we want to raise cash to solidify our position,” Swiderski said.

The company plans to spend 50 million zloty to 80 million zloty of the proceeds from the new share sale on acquisitions to consolidate the web portal market in Poland.

Wirtualna’s revenue stood at 216.4 million zloty in 2014, including 201.8 million zloty from ad sales. Adjusted earnings before interest, taxes, depreciation and amortization were 84.1 million zloty and pretax income was 38.4 million zloty. Net income was at 3.79 million zloty.

The company plans no dividend from the 2015 profit, but may change its payout policy next year, it said in the prospectus.

European Media may cut its stake to 33 percent from 57 percent of voting rights in the IPO. The fund has a 360-day lock-up period for remaining shares and plans to remain Wirtualna’s shareholder for two to three years, Innova Partner Krzysztof Krawczyk said at the press conference. Innova, which owns European Media with MCI Management SA, bought Wirtualna from Orange Polska SA for 383 million zloty in February 2014.

Pekao Investment, UniCredit Bank AG, PKO Bank Polski SA and MBank SA will help manage Wirtualna’s offering.

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