Existing shareholders also sold shares in the IPO
Telrad Raises NIS 80 Million in TASE IPO
Published in Globes on May 24, 2017
Telrad Networks Ltd., managed by CEO Ran Bukshpan, is about to become a public company, following the success of the institutional part of its TASE IPO.
Telrad issued 24% of its share capital, raising NIS 80 million at a company value of NIS 340 million, post-money, at NIS 6.50 per share. At the same time, Fortissimo Capital and other company shareholders (including Discount Investment Corporation (TASE: DISI) and Bukshpan), sold 24% more of the company’s shares, also for NIS 80 million. The public part of the IPO, led by Poalim IBI Underwriting and Investments Ltd. (TASE: PIU), Epsilon Investment House Ltd., and Leader Underwriters, will take place this Sunday.
This is the second attempt by Fortissimo to hold an IPO for Telrad; the first attempt failed in 2014, when Telrad published a prospectus for raising NIS 100 million at a company value of NIS 300 million, before money. After having to reduce the company value by 25% in order to hold the IPO, however, Fortissimo decided to call it off.
The sale of a total of 30.7 million Telrad shares, both newly issued shares and shares in an offer for sale, is planned. Fortissimo’s holdings in Telrad will fall to 32.5%, Discount Investment’s stake will shrink from 9.7% to 2.7%, and Bukshpan’s stake will drop from 5.7% to 2.2%.
Founded in 1951, Telrad develops and sells products for broadband wireless communications networks and provides construction and maintenance services for communications networks and operators. The company also plans and builds infrastructure for communications and IT systems. This activity is mostly overseas. The company has 1,300 customers and 800 employees.
Fortissimo first invested in Telrad in 2004, and increased its holding in 2009 by purchasing a controlling interest from Koor Industries Ltd. (TASE: KOR).
Fortissimo invested NIS 20 million in Telrad at a company value of NIS 100 million. Under Fortissimo’s management, Telrad changed its focus and underwent a recovery process in 2009-2010. The draft prospectus published by Telrad for its IPO shows that the company’s revenue grew 15% to $120 million over the past year. After cutting the company’s financing expenses, which were affected by the weakness of the Canadian dollar against the US dollar, the company’s net profit almost doubled to nearly $6 million.
The draft prospectus also reveals that Telrad last year paid its five most senior officeholders, headed by Bukshpan, over NIS 7 million ($1.9 million). The cost of Bukshpan’s employment totaled NIS 2.4 million.