Magic Software set for $30-40m US offering
Management is in the US for the road show.
Sources inform ''Globes'' that the management of Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC) is in the US for the road show among potential investors ahead of an offering in which the company will raise an estimated $30-40 million. The share price of the IT integrator, run by CEO Guy Bernstein, has risen 88% in the past 12 months, to reach a market cap of $324 million.
Magic Software files to raise $60m on Nasdaq
Magic's share price is close to a two-year high, and the rise in value has apparently created a good opportunity for raising capital.
Magic said in response, "Two months ago, the company filed a shelf prospectus, which is valid for three years. When the company decides to exercise it, it will announce this pursuant to the provisions of the law."
The shelf prospectus filed in late 2013 allows it to raise up to $60 million in an offering of shares, warrants, and/or bonds. The company will use the proceeds for general purposes, including acquisitions and investments.
Magic is one of the oldest Israeli companies on Nasdaq, listing in 1991. In 2010, after a rally in its share, the company raised $26 million in a private placement. At the end of 2013, it had $36 million in cash, and it tends to use the money for supplementary acquisitions.
Magic's last acquisition was Allstates Technical Services Inc. from KBR Inc. (NYSE: KBR) for $10 million in the fourth quarter of 2013. The US company provides IT, engineering, and telecommunications consultancy services. Its acquisition is intended to expand Magic's presence in the US and increase its customer base.
Magic posted $145 million revenue in 2013, 14.7% more than in 2012. GAAP-based net profit fell 1.8% to $15.9 million, but non-GAAP net profit rose 6.5% to $19.5 million ($0.52 per share). In line with the company's policy to distribute half of its annual profits as dividends, on March 14, it will distribute a dividend of $0.14 per share ($4.5 million) on its profits from the second half of 2013. The main beneficiary is the company's controlling shareholder, Formula Systems Ltd. (Nasdaq: FORTY; TASE: FORT), which owns 51.6% of Magic, and will receive $2.3 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 24, 2014