Kamada Ltd. and Babylon Ltd. are seeking to emulate the rally of the latest Israeli initial public offering as they plan share sales in New York.
Kamada, the Nes Ziona, Israel-based maker of treatments for hereditary lung diseases, hired Morgan Stanley and Jefferies Group Inc. to arrange the sale of as much as $50 million in stock in the U.S., a person familiar with the plans said yesterday. Babylon Chief Executive Officer Alon Carmeli said yesterday that the U.S. overcoming the budget impasse will boost equities as the company seeks to raise $115 million through a New York share sale.
Caesar Stone Sdot Yam Ltd., the last Israeli company to go public on U.S. markets with a March 21 IPO, has climbed 59 percent since its listing. The Bloomberg Israel-US Equity Index of the largest New-York traded Israeli companies rose for the first time in three days yesterday, led by Mellanox Technologies Ltd. The Standard & Poor’s 500 Index climbed yesterday amid investors’ optimism about fourth-quarter corporate earnings after Alcoa Inc. reported sales that exceeded projections.
“There is strong demand for offerings from companies with good track records, and Kamada certainly fits that,” Josef Schuster, the founder of Chicago-based Ipox Schuster LLC, which oversees about $2 billion, said in a phone interview yesterday. “Earnings look strong. The U.S. market has been fairly solid as well. We’re expecting even more asset flows into equities.”
The Bloomberg Israel-US Index added 0.6 percent to 86.09. Israel’s TA-25 Index added 0.5 percent to 1,216.75 at 9:56 a.m.
Kamada’s U.S. shares will be traded on the Nasdaq Stock Market and a prospectus will be filed with the Securities and Exchange Commission soon, said the person, who asked not to be named because they weren’t authorized to speak publicly about the sale. Chief Financial Officer Gil Efron declined to comment when contacted by telephone. Shares gained today for the first day in five, adding 0.9 percent to 34.89 shekels.
Babylon, based in Or Yehuda, Israel, said at the end of November that it would begin to meet with potential investors early in 2013. Shares slipped 1 percent to 26.66 shekels in Tel Aviv this morning. Carmeli said the company expects to continue to benefit from an increase in online advertising. The stock has gained 162 percent in the past 12 months.
SodaStream International Ltd., the Airport City, Israel-based maker of soda machines, has advanced 135 percent since its IPO on the Nasdaq in November 2010. Shares slipped 0.5 percent yesterday to $46.93.
JPMorgan Chase & Co. said last week that shares of SodaStream will extend their rally as its U.S. business grows, while Barclays Plc initiated coverage of the stock on Jan. 7 with an overweight rating, or the equivalent of buy.
The fact that SodaStream is also from Israel may help Kamada and Babylon as “SodaStream is almost a household brand now, and it has done really well,” said Schuster who manages the First Trust US IPO Fund, that gained 29 percent in 2012. “The appetite for attractive foreign companies will remain high.”
The performance of Caesar Stone, the Sdot Yam, Israel-based producer of quartz-based countertops, is second to Guangzhou, China-based Vipshop Holdings Ltd. among non-American companies that held IPOs in the U.S. over the past 12 months. Shares advanced 2.7 percent to $17.51 yesterday.
Mellanox, the maker of technology used to transfer and store data, gained the most in five months, jumping 4.8 percent to $50.04. Shares have lost 51 percent since the end of September. The Tel Aviv stock advanced today for the first day in four, gaining 4.6 percent to 188.3 shekels, or the equivalent of $49.81.
LivePerson Inc. advanced 1.4 percent in New York to $13.52 as Clal Finance Batucha Brokerage Ltd. began coverage with a market perform, or the equivalent of neutral rating. Shares in Israel rose 3.5 percent this morning to 51.98 shekels, or $13.75. Internet phone operator MagicJack VocalTec Ltd. sank to a seven-month low, falling 12 percent to $15.3.