The flotation of Mobileye, the biggest flotation on Wall Street so far this year, took place yesterday. The shares of Mobileye Global Inc. will start to be traded on Nasdaq today under the ticker MBLY. The offering was priced at $21 per share, which values the company at close to $17 billion, which is higher than the expected valuation in the prospectus published last week.
Mobileye issued 41,000,000 new shares, representing 5% of the company, to raise $861 million. This is in addition to a purchase of 4,761,905 shares by General Atlantic in a private placement at the same price as in the public offering, for gross proceeds of $100 million.
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Mobileye develops ADAS (advanced driver assistance systems) and solutions for autonomous vehicles. It was founded in 1999 by Prof. Amnon Shashua and Zvi Aviram, and was floated in New York in 2014 at a valuation of $5.3 billion. In 2017, at a time when it was traded at a market cap of $10.5 billion, it was acquired by Intel for $15 billion.
Intel’s determination to float Mobileye at a time of weakness in the market can be explained by the fact that Mobileye is committed to transferring $3.5 billion to it as a kind of dividend, with almost all the money raised in the offering ($600-700 million) earmarked for this purpose. Intel is in need of the cash for its other operations.
Last May, Mobileye paid Intel $336 million, which was also described as a dividend. Mobileye is committed to paying Intel $3.5 billion by April 2025, plus annual interest of 1.26%. At the beginning of July this year, Mobileye had $774 million cash.
After the expected payment to Intel, Mobileye shareholders will not receive dividends. The company states in its prospectus that it intends to retain future profits and not pay dividends in the near future.
Published by Globes, Israel business news – en.globes.co.il – on October 26, 2022.
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