Great bit on FNDTF:
Wednesday, Mar 17, 1999 Sun-Thu at 18:00 (GMT+2)
High Tech Features
Billion Dollar Company?
By Zvika Rubens
The most oustanding Israeli share on Wall
Street the past week was unquestionably
Fundtech, which has posted an aggregate rise
of no less than 52% in the past four days of
trading, and has reached just over $30 per
share. Fundtech, issued on Wall Street exactly
one year ago, has for months been presenting
impressive receipts, but this has not managed
to find expression in the share's performance,
which generally remained stuck at $18-20
throughout its first year on Wall Street.
In the past few days, it has become apparent
that what handsome financial results fail to do,
the magic word Internet can do. Fundtech's
indirect connection to the hottest sector on Wall
Street is the EPAY share, the "ticker" of US
company Bottomline Technologies, which is in a
very similar field to Fundtech.
Bottomline, issued a month ago at $13 per
share, has since completed a jump of no less
than 607% (!), closing last night at a price of
$92.
The connection between Bottomline and
Fundtech was made by Robertson Stephens
investment bank analyst Gary Kraft, who served
as leading underwriter for both companies. Kraft,
who sees considerable similarities between the
activities of the two companies, set a target
price at the end of the week of no less than $70
for the Fundtech share, and is evidently directly
responsible for the steep jumps the share has
posted in the past few days.
Fundtech specializes in developing software for
electronic billing and teleprocessing between
financial institutions, and is regarded as market
leader in this field. In the past three years, more
than two hundred companies have purchased
Fundtech products, and competitors such as
CheckFree of the US were elbowed aside, and
then turned into Fundtech distributors. In fact,
CheckFree is currently Fundtech's major
distributor.
Today, the total electronic payments market is
assessed at $1 billion.
Most of the market is composed of 3,000
financial institutions in the US, and 5,000
institutions around the globe. It is a market
likely to continue growing, against the backdrop
of the increasing need for automation of financial
processes. This includes clearing, money
transfers, electronic payments, online banking
for private customers, etc. Robertson Stephems
estimates that Fundtech is likely to take a
market share of 35%-40% in the future.
The company closed 1998 with revenues of $23
million. Robertson Stephens estimates the
company will close 1999 with revenues of over
$38 million, and will continue to show high
profitability.
Fundtech's major shareholder is Aura, mostly
identified with Boaz Misholi, who serves as
company chairman, and holds 23% of its
shares. In an interview, Misholi estimated
Fundtech will continue to grow, and reach a
market of over $1 billion. Even after the past few
days' wave of rises, Fundtech is trading at a
market value of only $330 million.
Misholi also commented on the abundant
speculations heard in recent days that the
company will be sold, and said that he does not
foresee Fundtech being sold at this stage. "If
such moves exist, I am not aware of them," said
Misholi. In all events, Misholi estimates that if
the company is sold at some future point, it will
not be to a rival high tech company, but to a
financial giant.
Published by Israel's Business Arena March 17,
1999
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