Magic Software, which makes business development solutions, announced that it will price the underwritten offering of 6 million ordinary shares at $8.50 a share. Formula Systems (1985) (FORTY), the company's largest shareholder, agreed to buy 700,000 ordinary shares at the public offering price. That purchase will give the company a 45.9% stake in Magic Software.
The company plans to use the new proceeds from the public offering for general corporate purposes such as funding of its working capital needs and funding potential acquisitions.
Barclays Capital Inc. and William Blair & Company, L.L.C. are acting as joint book-running managers for the offering, while Maxim Group and H.C. Wainwright & Co. are acting as co-managers for the offering.
TheStreet Ratings team rates MAGIC SOFTWARE ENTERPRISES as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAGIC SOFTWARE ENTERPRISES (MGIC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."