Glu finally opened the books

December 20th, 2006 by Arjan Olsder Posted in Companies & M&A | 1 Comment »

We got a sweet surprise this morning as the news reached us about Glu‘s IPO filing on NASDAQ. Glu hopes to raise $ 92 million in common stock. As we all know, IPO filing means opening up the books and so all mobile news resources are going trough the numbers and interesting facts pop up everywhere. So is Glu really the claimed number 2? Probably not, but the plans with the money are clear. Pay debts, expand and acquire.

Losses
Glu has lost a lot of money in the past years, which means the rumors in the industry where partly right. Over the past years, Glu lost $ 43.7 million (accounted at September 30 2006) of which a $ 10 million loss came in the first 9 months of this year.

Primary competitors
Glu listed Digital Chocolate, EA mobile, Hands-On, Gameloft, I-Play, THQ and Namco as primary competitors. Why is Disney missing from the list?

Branded vs. original IP
Glu’s branded games made 77.1% of the revenues in 2005 and 85% in the first nine months of 2006. The top 10 selling games from Glu bring in more then 50% of the revenue.

Channels
Primary channel seems to be Verizon Wireless which generates 20,9% of the revenues. Sprint counts for 12% and 11.4% comes from Cingular. Vodafone accounts for 10.7%. This group represents more then 50% of the revenues into Glu which makes the US their primary market.

Acquisitions
Glu started with the acquisition of Macrospace when it was still called Sorrent. Earlier this year, Glu bought iFone. At that time the financials where a mystery, but from the report we see they paid $ 23.5 million of which $ 19.1 million in stock and $ 3.5 in cash. The rest was transaction costs. There was also a bonus arrangement if iFone met certain milestones. Currently there is an internal struggle on if iFone did or didn’t made the milestones. The bonus would be $ 3.2 million in shares and $ 4.5 in subordinated unsecured promissory notes.

Salaries
The top five salaries 2006 in the company are;
– CEO Greg Ballard $ 1.31 million
– CFO Albert Pimentel $ 0.87 million
– Senior Vice President of worldwide marketing Jill S. Braff $ 0,77 million
– Senior Vice President of product development Alessandro Galvagni $ 0,74 million
– MD EMEA Kristian Segerstrale $ 0,68 million
The company has 226 employees of which 140 are in R&D positions. 123 persons of that are US based, 96 in Europe and 7 in Hong Kong. The European expansion of offices is clearly not counted.

Investors
The following investor details are found;
– BAVP (11.4%)
– Globespan (8.9%)
– Capital Partners (Unknown)
– Granite Global Ventures (Unknown)
– New Enterprise Associates (22.8%)
– Sienna Ventures (Unknown)
– Time Warner (Unknown, but invested $ 7.5 million)

This entry was posted on Wednesday, December 20th, 2006 at 10:38 am and is filed under Companies & M&A. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.