The share price of Israeli company Kornit Digital (Nasdaq: KRNT) has reached record levels, and the company has decided to take advantage of the opportunity to raise capital through a secondary share offering on Nasdaq. Kornit Digital reported this plan yesterday after the close of regular trading, sending its share price down 2.4% to $29.40 in late trading, which gives the company a $1 billion market cap.
Kornit Digital, managed by CEO Ronen Samuel, manufactures digital systems for printing on textiles. The company reported that it planned to offer 4.3 million new shares, based on a shelf prospectus. The underwriters will have a greenshoe option to buy 651,000 more shares within 30 days of the offering. At yesterday's closing price, the offering will raise $146 million (including the greenshoe option). Kornit Digital had $124 million in cash and short-term investments as of the end of the first quarter.
Kornit Digital plans to use the money from the offering for general business purposes and working capital. The company says that it will also use the proceeds for future acquisitions, including of complementary activities, technologies, and assets. At the same time, Kornit Digital says that as of now, it is not conducting any talks, and has no agreement for any acquisition deal whatsoever. The underwriters for the offering are Citigroup, Goldman Sachs, and Berkleys, as well as William Blair, Stifel, Needham, and Craig-Hallum Capital Group.
Kornit Digital raised $71 million in its IPO in April 2015 at $10 a share and a company value of $288 million. The company has since held a number of secondary offerings, although only one of them raised money for the company (the others were offers for sale). Kornit Digital raised $33 million in a secondary offering in January 2017 at $16.50 a share, while its controlling shareholder at the time, private equity fund Fortissimo, sold part of its holdings for $90 million. Four months later, Fortissimo sold more shares for the same amount at $20.60 a share, and the rest of its holdings in Kornit Digital in December 2018 for $70 million at $20.50 a share.
The trend in Kornit Digital's share this year has been positive, with the share price rising 56.8%. A month ago, Kornit Digital's share price suffered a reverse when investment concern Spruce, which specializes in short investments, recommended selling the share, claiming that it had a downside risk of 75-85%. The share price dropped 9% in response to the recommendation, but has since returned to its previous level. Kornit Digital dismissed Spruce's assertions, with Samuel calling them "a lot of nonsense." Samuel said that Kornit Digital's business with its strategic customers was "better than ever."
Published by Globes, Israel business news - en.globes.co.il - on June 12, 2019
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