Ormat Industries Ltd. (TASE: ORMT) subsidiary Ormat Technologies Inc. (NYSE: ORA) is planning acquisitions. The company has published a prospectus supplement with the US Securities and Exchange Commission (SEC) to raise a $92.5 million, after the underwriter’s commission, through the sale of 2.5 million shares to Lehman Brothers (NYSE:LEH).
Lehman Brothers handled the Ormat Technologies’ IPO in November 2004, when it raised $108 million, including in a green shoe option. It also handled the company’s secondary offering in January 2006, which raised $135.1 million, including in a green shoe option and after the underwriter’s commission.
The present offering is scheduled for Tuesday at $37.07 per share ($37.50 before the underwriter’s commission). The offering will dilute Ormat Industries’ stake in Ormat Technologies by 4.5% to 64%. The issue price is less than Ormat Technologies’ closing price of $37.74 on Friday, but the share later fell to $37.50 in off-floor trading.
In a notice to the Tel Aviv Stock Exchange (TASE), Ormat Industries said that it expects to make a capital gain of $43.7 million on the offering. The company added that in Ormat Technologies would use proceeds from the offering to build geothermal power stations, finance heat regeneration operations, and make acquisitions.
The final line in the laconic notice is the interesting one. It is believed that Ormat is planning a specific acquisition soon. The company does not need more than a few million dollars to make an acquisition in the heat regeneration sector, and it has sufficient cash from its secondary offering for the construction of geothermal power stations. It is therefore believed that the current offering, and its structure in the form of a bloc of shares to Lehman Brothers, implies urgency, i.e. for a specific purpose.
Published by Globes [online], Israel business news - www.globes.co.il - on December 17, 2006
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