Formula Systems (FORTY)

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Formula unit FTS plans secondary offering in London
Formula Telecom Solutions’s management is now meeting underwriters, and will reportedly decide on the structure and scale of the issue in a few weeks.

Tali Tsipori 7 Mar 06 15:09

Sources inform ''Globes'' that Formula Systems Ltd. (Nasdaq: FORTY; TASE: FORT) subsidiary Formula Telecom Solutions Ltd. (AIM:FTS) plans to hold a secondary offering in London in a few months.
FTS’s management is now meeting underwriters. The company will reportedly select an underwriter and decide on the structure and scale of the issue in a few weeks. FTS has a market cap of $55 million.

FTS went public in August 2005, shortly after the double terrorist bombings in London, which unsettled the City. Investors worried about the security situation in the British capital forced FTS to reduce the size of its IPO and to cancel its planned offer for sale. The company ultimately raised $7.5 million at a company value of $70 million.

FTS is again approaching investors while its share is traded at a substantial discount, compared with its IPO price. The share is currently traded at ₤0.955, 20% below its IPO price of ₤1.20. The company reportedly plans to exploit the secondary offering to expand the number of its investors by distributing some shares to investors in the US. The last Israeli company to do this was Orpak Industries (1983) Ltd. (AIM:ORPK).

Although FTS chairman Dan Goldstein, who is also chairman and controlling shareholder in Formula, has now chosen to hold a secondary offering in London, with an eye on the US capital market, he will probably try his luck in the US in 2007, by issuing FTS on Nasdaq.

FTS provides software solutions and billing and customer relations management (CRM) applications. Founded in 1997, Formula Vision Technologies Ltd. (TASE: FVT) currently owns 44.7% of FTS.

Published by Globes [online], Israel business news - www.globes.co.il - on March 7, 2006

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