Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC) and Compugen Ltd. (Nasdaq: CGEN; TASE: CGEN), two veteran Israeli companies on Wall Street, raised a gross $63 million and $51 million in secondary offerings on Nasdaq on Friday, only to see their share prices plummet.
Magic Software filed its shelf prospectus in November 2013, and exercised it quite quickly. On Friday, it issued six million shares at $8.50 per share for a gross $51 million. The IT integrator held the offering after its share rose 102% in the past year. The share price fell 10.4% on Nasdaq on Friday to $8.50, giving a market cap of $315 million.
The underwriters, Barclays Capital Inc. and William Blair & Company LLC have an over-allotment option to buy up to an additional 900,000 shares, which if exercised, will boost the gross proceeds by $7.7 million. Magic Software's controlling shareholder, Formula Systems Ltd. (Nasdaq: FORTY; TASE: FORT), bought 700,000 shares for $6 million, boosting its stake to 45.9%. Formula is controlled by Asseco Poland SA (WSE: ACP) with a 48.2% stake.
Before the offering, Magic had $36 million in cash, and the $48 million in net proceeds will boost its cash to $84 million, a fifth of its market cap.
Compugen filed its shelf prospectus with the SEC in January. On Friday, the drug discovery candidates company issued six million shares at $10.5 per share, raising a gross $63 million. The offering came after the share price rose 172% in past year. The share price fell 20.1% on Friday on Nasdaq to $11.34, giving a market cap of $470 million.
The underwriters - Jefferies LLC, JMP Securities LLC, Oppenheimer & Co. Inc. and Chardan Capital Markets have a 30-day over-allotment option to buy up to 900,000 shares, which if exercised in full, will boost the gross proceeds by $9.5 million. The offering boosts the company's cash reserves from $51.3 million to $110.5 million.
Earlier this year, Compugen announced that it was expanding its immuno-oncology pipeline program for a larger number of checkpoint target and product candidates for cancer immunotherapy to move forward in parallel. The company has an immuno-oncology commercialization agreement with Bayer AG (XETRA: BAYN) for two molecules, which could be worth as much as $500 million to Compugen if the drugs based on them reach market.
Published by Globes [online], Israel business news - www.globes-online.com - on March 2, 2014
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