Zohar Zisapel of Rad Binat Group, one of Allot's major shareholders

Allot on its way to NASDAQ $70M offering

Offering follows termination of talks for company's acquisition by US F5. In past year, Allot leapt by 320% due to rumors on its forthcoming acquisition. Tamir Fishamn Ventures, which is approaching end of line, will redeem most of its holdings (10%) in offering

Golan Hazani, Calcalist|Published: 07.25.11 , 19:19

Allot Communications, which is traded on NASDAQ at a $428 million market cap, will hold a second financing round to raise $70 million. Calcalist has learned that the forthcoming offering will be held in upcoming weeks and that Tamir Fishman venture capital fund is expected to sell off a considerable portion of its holdings in the offering.

The fund currently holds 9.7% of Allot's shares which is worth $42 million. The fund has reached the end of the line and the exit is inevitable.

It is unclear whether additional shareholders will partake in the sale offer, however the offering comes after the negotiations for the acquisition of the company by F5 foundered and the acquisition was scrapped.

In recent weeks, Allot has been enjoying a record market cap after its share soared to $18 following rumors of the acquisition. Negotiations with F5 continued for several months, but were brought to an end by the American communications equipment vendor.

Allot Communications, founded in 1997 by Yigal Jacoby and Michael Shurman, specializes in the development of IP service optimization for internet provider and recently for mobile providers as well. Allot's systems help allocate scalable band widths to various subscribers thereby optimizing network band width.

F5is traded on NASDAQ at an $8.2 billion market cap and is considered Israeli Radware's biggest competitor in the field web traffic. In 2004 F5 paid some $29 million for the acquisition of and Israeli company called Magnifire – an information security infrastructure developer. On the basis of the acquisition, F5 established a 60-emloyee development center in Tel Aviv's Ramat Hachayal high tech industrial zone.

Allot Communications completed an initial public offering on NASDAQ on November 2006 at $12 per share; however, investors were disappointed with the company's lagging revenues and losses it incurred over the subsequent years. These figures and the global financial crises drove the share's price down during the recession days of March 2009 to $1.4 per share.

In the first quarter of 2001, the company's revenues totaled $1.7 million which constituted a 38% climb against the same quarter the previous year. The company's adjusted net income (Non GAAP) reached $2.2 million.

Allot's major shareholders are Brookside Capital investment fund (14.2%); Zohar Zisapel of Rad Binat Group (11.7%); Tamir Fishman venture capital fund (9.7%), CEO Rami Hadar (2.3%) and company founder and director Yigal Jacobi (2.7%).