Nova raised $ 175 million in convertible bonds and the target...

Manufacturer of conductors and measuring instruments Nova Yesterday, it completed the first bond issue in its history. The company raised $ 175 million in zero-rate convertible bonds from American and Israeli institutional entities. Bank of America and Citibank led the offering.

The company originally planned to raise $ 150 million, but demand was five times higher, so it was decided to increase the amount raised by 16%. The amount raised will cost up to $ 200 million, if the underwriters exercise the option given to purchase another $ 25 million in bonds in the next two weeks.

Nova measurement solution Photo: PR

The maturity of the bonds in 5 years will be possible at a price of $ 74.6 per share, which expresses a premium of 27.5% on the price at the start of trading on the day of the raising and sets the company a target of $ 2.1 billion.

Nova, which is traded on the Tel Aviv and NASDAQ stock exchanges at a value of $ 1.64 billion, has risen 6.4% since announcing the results of the IPO today, completing a 48% increase since the beginning of the year, placing it sixth in the Tel Aviv-35 index in terms of return.

Nova noted that it expects record revenue for the third quarter of the year, which will be in the range of $ 70-68 million. This is compared to its previous forecast, which was in the range of $ 66-58 million. This updated forecast is also above the market forecast, which puts Nova’s revenues for the third quarter in the range of $ 63.6-62 million.

The company expects adjusted earnings per share for that period to be in the range of 56-51 cents per share. This forecast is higher than the lower and upper threshold of the previous forecast range by 50% and 19%, respectively (47-34 cents per share). It also exceeds the market forecast for earnings of 41-45 cents per share.

Nova CEO Eitan Oppenheim. Expected revenue for the third quarter

Nova is not the only Israeli to issue convertible bonds on Wall Street. The solar systems company Solaredge raised $ 550 million three weeks ago, leaving an additional 15% option for underwriters.

Dror David, Nova’s CFO, told L.A.CalcalistNova doubles every six years and has aggressive growth plans. Some of the growth engines also include acquisitions and market opportunities. The company’s growth in the past year has raised the level of interest of American entities, and about 100 entities have submitted bids.

“We chose a convertible bond tool because we found that the conditions in it were best both in terms of the lowest dilution for shareholders, and in terms of the best cost of capital. Apparently, the bond is at 0% interest. Only the buyer decides at what price and when to enter, but given the zero interest rate, and the conversion of the bond at 27.5% higher than the share price at the time of raising, buyers can be assumed to believe in strategic plans; After all, only if the price surpasses the conversion price will they benefit. “

Revenue in the second quarter increased 22.3% to $ 62.5 million compared to $ 51.1 million in the second quarter of 2019. Adjusted earnings were $ 13.7 million or 48 cents per share compared to $ 13.4 million or 47 cents per share in the same period last year. Of analysts’ expectations, 48-42 cents a share.