Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC) is raising $21.2 million in a private placement with institutional investors. The company expects the offering to be closed by Thursday. Magic Software provides cloud enabled application platforms and business integration solutions.

Under the terms of the offering, Magic will sell 3.26 million ordinary shares at a price of $6.50 per share. Some of the purchasers will also receive warrants to purchase up to 1.13 million ordinary shares at an exercise price of $8.26 per share.

The warrants are exercisable as of six months from the date of issuance, have a term of three years, and the exercise price is subject to future adjustment for various events, such as stock splits or dividend distributions.

The company said that it intends to use the proceeds of the private placement for working capital purposes.

Rodman & Renshaw LLC acted as the exclusive placement agent for the offering.

Magic's share price fell 10.6% to $6.82 on Nasdaq yesterday, giving a market cap of $218.62 million, but clawed back 1.03% in after-hours trading to $6.89. The share price opened down 5.6% to NIS 26.10 on the TASE this morning.

Published by Globes, Israel business news - www.globes-online.com - on December 21, 2010

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