Fortissimo Capital is preparing for its first major sale: the sale of some of its investment in Kornit Digital(Nasdaq:KRNT).
Kornit last week published a shelf prospectus for a secondary offering, as part of which it listed Fortissimo shares for trading, enabling the company to sell them on the market when it wishes. Some of the shares allocated to Kornit CEO Gabi Seligsohn were also listed for trading.
Kornit develops machines for digital printing on textiles of various kinds, such as clothing, curtains, and bedcovers. Founded in 2002, Kornit held its Nasdaq IPO in April 2015, raising $71 million (gross) at $10 per share and giving the company a $308 million market cap. The company share price climbed to $17 following the offering, fell to $8, and has since recovered.
Managed by founding partner Yuval Cohen, Fortissimo acquired a controlling interest in Kornit in 2011 with a $16 million investment. Fortissimo held a 70% stake in Kornit before the latter's IPO, which was later diluted. Fortissimo's current stake is 48.5% with a market value of $190 million.
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Fortissimo does not plan to sell all this holdings now; only some of its shares will be sold. Fortissimo believes that Kornit's growth in the coming years will increase its value and further improve the fund's profit on its investment in Kornit. Among other things, the current sale is designed to bolster the number of Kornit shares floating on Nasdaq and make them more marketable, while improving Fortissimo's liquidity.
Seligsohn, who joined Kornit a year before its IPO, owns 1.7% of the company according to the prospectus, including 36,000 shares and 493,000 options exercisable in the next two months. He also has 398,000 options exercisable at a later time. 90,000 of his shares with a current value of $1 million have been listed for trading.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 9, 2017
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