The Fortissimo Fund, which controls Kornit Digital (Nasdaq: KRNT), is exploiting the sharp rise in Kornit's share price in the past few months and selling about one third of its holding in the company.
Earlier this month, Kornit, which develops, manufactures and markets industrial digital printing technologies for the clothing and textile industries, published a shelf prospectus in which it registered Fortissimo's shares for trading, so that the fund can sell them on the market whenever it decides to do so. Some of the shares allocated to Kornit CEO Gabi Seligsohn were also registered for trading.
The company reported today that the offering will take place after the close of trading in New York today or on one of the coming days. The offering comprises 7,000,000 ordinary shares, 2,000,000 of them offered by Kornit, and 5,000,000 by shareholders of the company, substantially all by the Fortissimo Capital Fund II (Israel) L.P. Kornit and the selling shareholders have also granted the underwriters a 30-day option to purchase up to an additional 1,050,000 shares.
Kornit says that it intends to use the proceeds from the offering for general corporate purposes. It will not receive any of the proceeds from the sale of shares being offered by the selling shareholders.
Barclays and Citigroup are acting as joint book-running managers and as representatives of the underwriters in the offering. William Blair, Stifel, Canaccord Genuity and Needham & Company are acting as co-managers.
Assuming that the offering price will be around $17 per share, Fortissimo will receive some $85 million and Kornit $35 million.
Kornit's share price has risen 40% since the beginning of this year, and 74% in the past three months. The share price was at $17.75 before the opening of trading on Wall Street today, giving the Rosh Ha'ayin-based company a market cap of $585 million. Kornit was founded in 2002, and made its IPO on Nasdaq in April 2015. The issue price was $10. Since then it has climbed to a peak of $17 before falling to $8 and then recovering. Fortissimo acquired control of Kornit in 2011 when it invested just $16 million. It currently owns 48.5% of the company, with a current market value of $270 million, so that it has made at least 24 times its investment.
Seligsohn, who joined Kornit about a year before the IPO, holds a 1.7% stake in the company, comprising 36,000 shares and 493,000 options exercisable in the next two months. He holds a further 398,000 options that are not yet exercisable. 90,000 shares have been registered for trading.
In the first nine months of 2016, Kornit posted a 26% increase in revenue to $77 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 23, 2017
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