VoIP technology pioneer Vocaltec has agreed to a merger with Ymax Communications, the creator of magicJack, in a merger agreement that priced Vocaltex at 220% over its market price - and sent its share soaring.
The new company will be worth approximately $245 million, or $17.50 per share.
Before the merger, Vocaltec carried out a reverse stock split at a ratio of one to five. Post merger, Vocaltec shareholders will own 10% of the merged company or 1.1 million shares, pricing Vocaltec at approximately $24.5 million.
Before the announcement, Vocaltec was worth only $7.7 million, which means the deal valued the company at 220% over market price. Following the announcement, the company's share price leapt 150% to $3.30, and the company's value rose to $19.3 million.
Vocaltec invented VoIP technology at the end of the 1990s but has struggled in recent years, after selling most of the original company patents for cash. Its 2009 revenue was a mere $6.1 million, and net profit for 2008 was just $3.7 million. A substantial part of income for 2008 came from that same patent sale.
The company, managed by Ido Gur, will retain its Israel branch after the merger. Several employees were dismissed a month ago, and more are expected to leave after the merger goes through.
Ymax is essentially using Vocaltec as a vehicle to bring the privately owned American company onto the public market. It will change its ticker symbol from VOCL to CALL, and the merged company's ceo will be Dan Borislow, founder of Ymax Communications.
Merged income is expected to be between $110 million and $125 million in 2010, and the merged company's liquid capital will be approximately $40 million.
Ymax's magicJack device enables an ordinary domestic phone to be connected to the USB port of any PC, letting users to talk by phone online and virtually eliminate their phone bills.
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