Technology firm prepares for P1.43-B IPO

Technology firm Xurpas Inc., one of the country’s major independent mobile consumer content providers, has obtained the approval of the Securities and Exchange Commission for its plan to raise as much as P1.43 billion via an initial public offering.

Based on SEC documents, Xurpas was given the go-ahead to sell 344 million primary common shares through an initial public offering at a maximum price of P4.19 per share, to bring 20 percent of its total shares to public hands.

Xurpas is a technology company specializing in the creation and development of digital products and services for mobile end-users. Its portfolio includes online casual games, messaging and other social discovery applications as well as call/SMS/ data bundles, peer to peer mobile airtime credit transfers and mobile commerce.

The company is owned and managed by a team of technopreneurs led by Nico Jose Nolledo (chair, president and chief executive officer), Raymond Gerard Racaza (treasurer and chief operating officer) and Fernando Jude Garcia (chief technology officer).

The company targets to list its shares on Nov. 12 but the timetable is still subject to the approval of the Philippine Stock Exchange.

Xurpas plans to use the proceeds from the offering for regional expansion, particularly to beef up distribution capabilities in Indonesia, Bangladesh and Thailand. The rest will be used to develop and expand existing content alongside other general corporate purposes.

SB Capital is the sole issue manager, book-runner and lead underwriter of this offering.

Originally incorporated in 2001 as a sub-contractor of a Finland-based telecom operator Sonera, the company has since then obtained a license from the National Telecommunications Commission to create and deliver mobile consumer content directly to local telcos like Smart, Globe Telecom and Sun Cellular and other businesses. It is one of the largest independent mobile consumer content providers in the Philippines in terms of revenue.

Xurpas has since then grown into a technology company with an extensive mobile consumer content and services portfolio designed for mobile and online consumers. It has also developed considerable expertise in creating, developing and managing proprietary platforms and enterprise applications for telcos and other businesses. The company has grown by an average of 75 percent from 2011 to 2013, enjoying an average margin on earnings before interest and taxes of 42 percent over the same period.

As of the end of 2013, the company had total assets of P182 million while total revenue and net income for the year amounted to P252 million and P133 million, respectively. In the first semester this year, net income amounted to P100 million on the back of P189 million in revenue.

For 2014, the company believes that its online casual games business, with operating margins in excess of 70 percent, will be its largest cash cow.