Saifun Semiconductors Ltd. (Nasdaq:SFUN), a developer of NROM flash memory processors, completed its secondary issue on Nasdaq on Friday. The move was natural for the company, which went public in early November 2005. When the results of the IPO became known, and following a 50% rise in the share price on the first day of trading, it was clear that Saifun’s shareholders would try to sell shares, after opting not to hold an offer for sale as part of the IPO. Five and a half weeks before the vesting period expires, the shareholders carried out their mission, and sold shares for 29% above the company’s IPO price.
Saifun raised a gross $115.6 million, of which $105.3 million will accrue to shareholders who sold stock, and $10.3 million will accrue to the company. Saifun had $175.8 million in cash at the end of 2005, which means that the current issue was of token value.
In contrast to prior reports, Saifun’s secondary issue was less than its IPO, even taking the green shoe option into account. In its IPO, Saifun raised $135.1 million, whereas it raised $132.9 million in its secondary issue, including the green shoe option. In the secondary issue, Lehman Brothers was the sole book-running manager, Citigroup and Deutsche Bank Securities were joint lead managers and CIBC World Markets, William Blair & Company, Raymond James and WR Hambrecht &+ Co were co-managers.
The share price in Saifun’s secondary issue was 28.7% higher than the IPO price. The price for the secondary issue was set at $30.25, 20% below the share’s peak price in mid-January.
Saifun’s share rose 11% over the past month, probably driven by the pending issue. When the results of the issue were released on Friday, turnover in Saifun’s share was 13 time its daily average, although the share closed unchanged. The share fell 2% in after-hours trading, to reflect a market cap of $946 million.
Saifun founder, chairman and CEO Bopaz Eitan will own 36.1% of the company following the secondary issue, worth $340 million. He sold $12.9 million worth of shares, and can be expected to sell another $2.3 million provided the underwriters exercise their green shoe option.
Published by Globes [online], Israel business news - www.globes.co.il - on April 2, 2006
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