Medical Compression Systems (DBN) Ltd. (MCS), a developer of devices for the prevention of blood clots during surgery, has filed a new prospectus with the Israel Securities Authority to go public on the Tel Aviv Stock Exchange (TASE). MCS plans to raise NIS 35 million in stocks and convertible bonds.
MCS filed a prospectus for an IPO during the previous quarter, but withdrew it a few days before the end of the quarter. The structure for the previously planned flotation was somewhat different: the company planned to raise NIS 24 million in stocks and warrants. The company value for both the previously planned IPO and the current one are the same, and unknown.
MCS hopes to obtain NIS 23 million in cash from the currently planned flotation, with the rest of the proceeds deposited with a trustee, and released in installments subject to reaching certain milestones. The underwriters are Poalim IBI Underwriting and Investments Ltd. (TASE:PIU) and Apex Underwriting and Issue Management Ltd.
Around the same time that MCS withdrew its prospectus, the company signed an $800,000 contract to supply 1,300 devices to hospitals in the US. MCS company director Hezi Nissan, who owns a 47% controlling share in the company, said at the time, “We believe that this contract will lead to contracts with other large hospitals. Consequently, we decided to call off the IPO, and review whether a flotation on the TASE was even worthwhile, and if so, at what company value and how much we ought to raise. Market sentiment has been also pessimistic lately. If we postpone the IPO by a few days, we’ll have to hold it on the basis of the financial report for the upcoming quarter, which is a good opportunity to think things over.” Nissan is the founder and chairman of Nissan Medical Industries Ltd. (TASE: NISA).
As things turned out, MCS very quickly decided that going public on the TASE was worthwhile.
MCS manufactures a pneumatic compression device that helps blood circulation in patients’ limbs during surgery, thereby helping to prevent blood clots. Since obtaining US Food and Drug Administration (FDA) marketing approval for its device three years ago, the company has posted several million dollars in sales in the US.
Published by Globes [online], Israel business news - www.globes.co.il - on April 25, 2006
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