Kornit Digital, which develops digital machines for printing on textiles, will offer 7.1 shares at $13-15 a share in its upcoming Nasdaq IPO. This means that proceeds will be in the $92.3-106.5 million range (an average of $99.4 million) at a company value of $373-431 million, after money (an average of $402 million). The IPO will not include an offer for sale. The company share will be traded under the ticker symbol KRNT.
The green shoe option for the underwriters will total 1.065 million shares, which would give the company an additional $13.8-16 million. Founded in 2002, Kornit sold its first printer in 2005, but is really only getting started now, after being acquired and restructured by Yuval Cohen's Fortisssimo Capital private equity fund. Cohen is the company's chairman, and the CEO is former Nova Measuring Instruments CEO Gabi Seligsohn.
Fortissimo owns 69.6% of Kornit's share capital, for which it paid only $16 million. At a company value of just over $200 million, Fortissimo will have increased its investment 13-fold on paper.
Digital textile printing a growing niche
Kornit depends on the global textile market, which totals $1 trillion, but in which growth is slow. This number, however, is not necessarily relevant to the company, because the digital textile printing market is a niche within the global textile market, and as defined by Kornit, textiles also mean household utensils and the like. According to its prospectus, Kornit believes that most of the 33 billion sq.m. of textiles printed in the current year will be printed using analog technology, with only 2% (780 million sq.m. of printed textiles) printed digitally. This niche is projected to grow by an annual average of 20% in the medium and long term. Within this niche, digital printing on clothing will be the fastest growing niche, compared with household utensils and other textiles.
Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2015
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