CommTouch to Sell Bigger Chunk of Company in IPO This Week
Ein Vered, Israel, July 11 (Bloomberg) -- CommTouch Software
Ltd., which delayed its public offering twice over the past two
weeks, said it now plans to sell a bigger chunk of the company
and boost its value to more than $230 million.
The developer of free e-mail systems, with offices in Ein
Vered, Israel and Santa Clara, California, amended its prospectus
on Friday at the U.S. Securities and Exchange Commission to
increase the number of outstanding shares by 1.3 million and sell
one-third of them instead of one-quarter.
The move, reflecting a $20 million investment promised last
week by two firms connected to software billionaire Paul Allen,
required another 48-hour delay after an expected stock sale on
Friday was canceled. Now the offering will probably be made
Monday at the earliest, with shares likely to begin selling at
$15 to $17 on Tuesday, bankers said.
With the $20 million investment from Allen's Vulcan Ventures
Inc. and Go2Net Inc., which is contingent on the public sale
moving forward, the company will be selling one-third of its 13.6
million shares to raise about $72 million. Consequently
CommTouch, which reported a $4.4 million loss last year on
$389,000 in sales, may be valued at as much as $231 million.
The money will be used to expand sales and marketing and
build the company in international markets, according to the
amended prospectus. The added shares will be split two-thirds for
Go2Net and one-third for Vulcan.
The involvement of Allen, who helped Bill Gates found
Microsoft Corp. and ranked third last month on the Forbes list of
the world's wealthiest working billionaires, could increase
interest in the share sale and in CommTouch, until now an obscure
software development company that started in an Israeli chicken
coop.
Go2Net fell 9/16 to 88 7/16 on Friday.
U.S. Bancorp Piper Jaffray, the Minneapolis-based investment
bank that is managing the sale, declined to comment.
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