Medgenics Ltd. (AIM:MEDG; AMEX: MDGN) was the first Israeli company listed on London’s Alternative Investment Market (AIM) to dual list on Wall Street, and Telit Communications plc (AIM:TCM) now appears to be following suit. In a statement, the company said, "Telit… has decided to consider undertaking a potential initial public offering in the United States. Such an offering will be dependent upon market conditions and would be expected to occur, if at all, in the second half of 2012."
Telit did not state on which US stock market it would hold the offering, but it will presumably be held on the Nasdaq Capital Market, which is for small cap companies, or on the American Stock Exchange (AMEX), which is owned by the New York Stock Exchange.
Telit, run by CEO Oozi Cats, develops machine-to-machine wireless technology, which enables the transfer of information between remote automated systems by wireless communications. For example, the technology can link an ATM with a bank's central server, which manages customers' accounts.
Objective: More cash
Telit's share price rose 0.6% by midday in London to ₤0.45, giving a market cap of ₤46 million. The share price has been halved in the past year, which makes the timing of the New York offering somewhat problematic. Companies usually plan a secondary offering during bull markets, not bear markets, like the one currently affecting the company's share price.
Telit presumably wants a New York listing to improve its position in the US market, and make the share more liquid (trading in the share in London is negligible), and possibly also to increase its cash reserves ahead of another acquisition. Telit had $4.7 million in cash at the end of 2011, after raising $30 million and immediately investing it in the acquisition of Motorola M2M for $26 million. The offering has not turned out to be a great success, as investors have lost 56% of their investment.
Telit expects to report $180.3 million revenue in 2011, 34% more than in 2010. The company posted a net profit of $2.6 million in the first half of 2011, up 89% on the $1.5 million in the first half of 2010. Revenue rose 36% to $81.1 million from $59.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2012
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