Leading ‘IB’ in gaming space launches $100 million IPO – could Forex IBs be next?

XLMedia announces plans for a London Stock Exchange AIM IPO before the end of March.

We know that a lot of eyes in the forex world will be on the London Stock Exchange and the attempt of XLMedia to go public over the next several weeks. XLMedia is an ‘IB’, or ‘Affiliate’ in online-gaming-world speak, sending traffic and customers to more than 150 online gambling websites, running its own network of more than 2,000 websites in 17 languages.

While not involved in the forex industry, XLMedia’s ability to sell its business model to public market investors could indeed influence similar moves by leading Forex IBs. XLMedia, like Forex and Binary IBs and affiliates, doesn’t really have clients of its own — rather, it relies on other businesses (i.e. online gaming sites) to close on traffic it delivers, sharing the revenues generated by those clients.

The people behind XLMedia are no rookies in the world of gaming and public markets. XLMedia’s Chairman is Chris Bell, former CEO of Ladbrokes (LON:LAD), one of the UK’s largest gaming outfits, which trades on the LSE at a market cap of about £1.5 billion ($2.5 billion). XLMedia’s shareholders include Israeli industrialist Zvika Barenboim and 888.com (LON:888) backer Shai Ben-Itzhak. XLMedia’s founder and CEO Ory Weihs is a professional poker player turned online entrepreneur.

XLMedia is formally registered in Jersey, but has most of its personnel and operations based in Israel and Cyprus. The Telegraph reports that in 2012, the most recent year in which audited numbers are available, XLMedia had EBITDA of $13.5 million on revenues of $26.1 million.

In its IPO, to be run by appointed bankers Cenkos Securities, XLMedia intends to raise between $30-40 million, at a company value target of about $100 million.

With CFD broker Plus500 trading at nearly 5 times its July 2013 IPO price — at a valuation above $1 billion — we believe that other Forex IPOs will be soon on their way to the capital markets. And if XLMedia is successful in its IPO quest, we believe that Forex IBs with similar business models might also take a look.

Stay tuned to LeapRate as we follow this story….

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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