April 1, 2014 / 11:40 AM / in 5 years

Polish chatroom provider LiveChat aims for No.1 as IPO beckons

WARSAW (Reuters) - Poland’s LiveChat Software, which hopes to become the world’s leading contractor for corporate customer service chatrooms, will reward investors who sign up for its IPO this month by paying out all its profits as dividends, its CEO said.

Currently ranked third with 7 percent of a rapidly expanding global market for messaging software that firms can use to communicate with visitors to their website, LiveChat launched the subscription period for institutional investors in its initial public offering on Tuesday.

The firm is based in the southern city of Wroclaw and its stockholders aim to get 60 million zlotys from the offer of 3.24 million existing shares at 18.5 zlotys each, valuing it at 476 million zlotys overall.

“We are expanding faster than our competition,” Chief Executive Mariusz Cieply told Reuters. “We had expected that we would be acquiring 200 clients per month, but we have significantly exceeded this number in the last 30 days.”

LiveChat sells its web-based chat services mostly to small- and medium-sized businesses. But it says its customers also include global giants such as Bosch and Adobe (ADBE.O), as well as the U.S. Department of State and Virginia’s tax office.

Cieply said LiveChat had over 7,000 clients in March, and hoped to expand this to 8,500 this year, putting it on a par with U.S. market leader LivePerson.

“Our market is based on the principle of winner-takes-it-all and this is why we want to have the highest number of clients,” he said.

It expects that market to grow about 20 percent a year in coming years.

Research firm LeadLedger estimates LivePerson’s market share at 22 percent, and No.2 firm Zopim, headquartered in Singapore, at 8.5 percent.

GLOBAL REACH

Polish IT specialists have a strong reputation, having won international programming contests such as U.S.-based TopCoder, and many are employed at leading global software firms.

But so far only a few Polish IT firms, including the creator of computer game Witcher, CD Project (CDR.WA), have achieved international success.

LiveChat’s expanding global reach is illustrated by the fact that about 45 percent of its revenues come from the United States and just 4 percent from Poland.

The company expects to raise net profit by over 50 percent to 14.9 million zlotys in the financial year ending March 2015. That translates to a forward price/earnings ratio of 32, less than LivePerson’s (LPSN.O) 48.

Cieply said the company does not need fresh capital for growth. LiveChat provides its services on a Software-as-a-Service principle, charging clients a monthly fee. It uses the money to pay for servers and IT specialists, handing out all of the profits.

“We are currently not engaged in talks about taking over other companies and we plan to continue paying out all our profits in the form of dividends,” Cieply said.

LiveChat is currently owned by a group of founders and staff, including the CEO, as well institutional investors led by Polish private equity fund Tar Heel Capital, which holds under 40 percent.

Its debut on the Warsaw Stock Exchange (GPW.WA) is provisionally scheduled for April 10, said brokerage Trigon DM, which is managing the offer.

Reporting by Marcin Goettig; Editing by John Stonestreet

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