Tefen Industrial Engineering Management and Systems Analysis (TASE: TLV), which recently merged cannabis growing activity into itself, announced the enlargement of its planned private placement from NIS 11 million to NIS 16 million. Assuming that the warrants granted in the placement are exercised, the company could obtain an additional NIS 10 million.
The company reported that its new investors included veteran tycoon Leon Recanati, who in addition to his business as a member of the Recanati family and his philanthropic activity previously invested in medical companies through venture capital funds GlenRock Israel and Rainbow Medical; Saul Kaye, a leading cannabis expert; Sitrin Capital; and Yaki Amsalem from the Almog Group. One interesting investor in the round is Shavit Capital founder and managing partner Gary Leibler, who usually invests in companies before their IPOs. Leibler invested his own money in this case.
The investors will buy 6.8% of the company's share capital for NIS 14.85 million. The share price for the allocation is NIS 6.60. As part of the deal, Tefen undertook to refrain from additional private placements at a lower share price than the one in the allocation and from offering warrants at a lower price.
Non-marketable warrants will also be allocated, each of which is convertible into one ordinary share in the company. The shares resulting from the exercise of these warrants will amount to 3.4% of Tefen's share capital, Full exercise of the warrants will give the company an additional NIS 10.1 million. Tefen controlling shareholders Alvit LCS Pharma and Ori Weiss will also inject NIS 1 million into the company at NIS 8 per share.
Tefen's closing share price yesterday was NIS 7.75, 14.69% higher than the price in the deal. Tefen's share is currently up by over 8% on the day on an NIS 844 million turnover, pushing its market cap up to NIS 259 million.
Tefen is a veteran consultancy company whose revenue has been declining in recent years, accompanied by losses and cash flow problems. It was supported by large owners' loans before the company entered the cannabis sector in May 2018. Since then, the company's share price has skyrocketed 1,500%. Like most of the new cannabis companies on the TASE, the company is not yet producing cannabis; it is still in the setup stage of its activity.
Alvit Pharma and Ori Weiss are responsible for setting up Tefen's cannabis activity. Alvit Pharma was founded in order to develop special cannabis products on the basis of knowledge in conventional pharmacy. Its founders are Nachshol Cohen, Yoram Sela, and Itzhak Lamensdorf. Tefen last week reported the completion of its merger with Alvit Pharma and Ori Weiss.
Published by Globes, Israel business news - en.globes.co.il - on March 12, 2019
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