After several months of drought, yesterday saw the issuance of an Israel high-tech company on Wall Street: Optibase, which engages in the delivery of video files on communications networks, raised a gross $17.5 million ($14.5 million net) in this IPO. As part of this capital raising exercise, the current shareholders of Optibase sold 1.85 million shares, pocketing a handy $13 million.
In view of difficulties arising from a chilly reception, the underwriters, Nomura International, Unterberg, Towbin, Needham & Co., had to reduce the price from the original range of $8-9 to only $7 per share, a significant, 20% cut.
The company proudly lists its customers, including well known entities such as IBM, Stanford University, the BBC television service and others. Optibase has marketing agreements with customers Cisco, Oracle and Silicon Graphics.
But the company’s three largest customers in 1998 were Harmonic Lightwaves of the US, Hughes Olivetti and Gilat Satellites of Israel, which were responsible for 26% of the company’s income in that year.
Optibase was founded in 1990 by Motti Gura, who hit the headlines after the collapse of high tech company Adacom, which he had entrepreneured. It seems that, in order to avoid awkward explanations, Motti Gura preferred to remain behind the scenes and not to hold any official position. He holds his shares in Optibase through a holding company by the name of K.R. Trading, owned in equal shares by Gura and his wife, Vicky.
Like the other principal shareholders, Gura took advantage of the IPO to dispose of part of his holdings, raking in a nice profit. The sale of the shares fetched him and his wife $2.1 million in cash, while the balance of his holdings is estimated at $3.8 million. Even post-issuance, he is still the major shareholder, with 6.7% of the shares.
Published by Israel's Business Arena April 8, 1999