Music streaming business Deezer is seeking at least €300m in a Paris share sale, valuing the company at as much as €1.1bn as it tackles Spotify and Apple’s more recent products.
The IPO, trading is targeted to begin at the end of this month, would value the French company at €900m to €1.1bn after it sells 8.2m new shares at €36.40 to €49.24 apiece.
Existing shareholders, including founder Daniel Marhely, Idinvest Partners, and French telecommunications tycoon Xavier Niel, may sell stakes through an over-allotment option representing as much as 15% of the sale, Deezer said.
“The music market is rebounding after some tough years, and the streaming segment should grow even faster,” chief executive Hans-Holger Albrecht said in a conference call. “We’re just at the beginning.”
Deezer, started in 2007 by Marhely, who quit school at 16 to work as a developer for internet start-ups, had 6.3m subscribers at the end of June, according to the IPO filing.
The company, whose largest shareholders also include Leonard Blavatnik’s Access Industries, is smaller than Swedish rival Spotify, which has more than 20m paying subscribers and was said to be valued at $8.5bn (€7.4bn) in its most recent financing round.
Deezer now faces intensified competition after Apple introduced its music-streaming offering in June. Albrecht said it has not hurt Deezer so far. If anything, Apple will have a positive effect by helping develop the streaming market, he said.
“Since the launch of Apple’s service we haven’t seen any kind of impact on our business,” Albrecht said. “Apple doesn’t change things fundamentally. We’re used to tough competition.”
Deezer has a track record of teaming up with phone companies to sell its premium subscriptions coupled with mobile-phone packages.
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