Cyberark, Israel Chemicals Enjoy Happy New Year on Wall Street

Cyber-security firm raised $86 million in IPO, while ICL sold more than 70 million shares on New York Stock Exchange.

Cyberark

It was a big Rosh Hashanah for two Israeli companies making striking IPOs on Wall Street: Cyber-security company Cyberark, whose share jumped 86% in its first three days of Nasdaq trading; and the more august Israel Chemicals, whose New York Stock Exchange debut is another step away from Israel’s business scene by the company and its owners.

Software company Cyberark raised $86 million in its IPO on Wednesday, selling 15% of its shares. The company was Nasdaq’s biggest gainer on Wednesday. By the time trade ended on Friday, the share had gained 86% in its first three days, making it one of Nasdaq’s most active stocks.

Cyberark, which develops software to protect against advanced cyber attacks, had initially planned to raise $75 million at a total company valuation of $470 million. It had initially intended to sell shares for $13 to $15 apiece. Due to demand, however, the initial share price was ultimately set at $16.

Following Friday’s gains, Cyberark was trading at a market cap of $881 million, with shares trading at $29.80 apiece.

The company intends to use the proceeds from the IPO to buy other companies in its field whose operations can be incorporated into its current line of business. The company intends to increase its workforce and global sales through these acquisitions.

Cyberark’s products enable customers to identify and track unconventional use within corporate computer systems in real time. Among other things, the software notes when users with administrative access enter parts of the computer system that are ostensibly not relevant to them, unusual file downloads, and other suspicious actions. It blocks these kinds of activities.

The JVP fund, which had held 46% of Cyberark’s shares, is among the big profit takers from last week’s IPO. JVP did not sell any shares during the IPO, and now that its holding has been watered down, owns 36.8% of the company’s share capital.

Cyberark has 364 employees, two-thirds of them in Israel. It was founded in 1999 by Alon Cohen and Udi Mokady, and changed directions in 2006, entering its current field. According to its third-quarter financial report, revenues were up 40% versus the parallel quarter in 2013, to a total of $66.2 million.

Meanwhile, the Israel Corporation completed a sale of 72.4 million shares of subsidiary Israel Chemicals on Wall Street late Tuesday night, at a total value of $507 million. The shares were sold to the American public at large and to Israel institutional investors at $7 apiece – 8% less than their closing price on the Tel Aviv Stock Exchange a day earlier.

As of Friday, ICL shares were trading at $7.20 on the New York Stock Exchange.

Underwriter Morgan Stanley has an option to buy another 6 million shares within 30 days of the launch. If it takes the option, the Israel Corp. will have sold 6.2% of ICL, leaving it with only 46.2% of the company.

ICL, which has mining operations at the Dead Sea, is Israel Corp.’s main asset. The floating of ICL shares on Wall Street, and the departure of Israel Corp. CEO Nir Gilad, both pave the way for Israel Corp. to split into two firms – a move that is up for a vote by shareholders and likely to take place within the next few weeks. It will represent another step away from the Israeli business scene by Israel Corp. controlling shareholder Idan Ofer.

One of the Israel Corp. spinoff companies, to be named Kenon, would be traded on Wall Street as well. One of that company’s main assets would be IC Power, which has power plants in 10 Latin American countries and also owns Israel’s largest private power plant, in Rotem.

Currently one of Israel’s biggest conglomerates, Israel Corp. had tried to sell ICL to Canadian chemicals company PotashCorp. less than a year ago.

Now that ICL is trading on Wall Street, there’s a chance that it could withdraw from trade on the Tel Aviv Stock Exchange. ICL shares were responsible for an average of 3.5% of the TASE’s total trading volume last year, and account for 6.3% of the blue-chip Tel Aviv-25 Index.

Bloomberg