Israeli Enterprise video solutions Kaltura: We have received a purchase offer for $383 million


by Ifi Reporter Category:Financial Jul 29, 2022

Enterprise video solutions company Kaltura reports that it has received a purchase offer at a value of $383 million, a 27% premium over the last closing price on Wall Street. The potential buyer is a competitor of Kaltura called Panopto, which already at the beginning of June announced its intention to buy Kaltura. 

Earlier this month, it already put a concrete offer on the table, but Kaltura for its part only disclosed the contacts now, when the offer was improved, and more importantly - when Panopto's partner in the move, the K1 Foundation, became an interested party in Kaltura and left it no choice but to report it.

"Although we are disappointed that the Kaltura board (+6.78% 2.52) rejected our improved offer without developing a meaningful dialogue with us, we are still committed to bringing about a deal between the two companies," Panofto wrote to the Kaltura board.
About a year ago, Kaltura was issued on Wall Street at a value of 1.25 billion dollars, after a few months earlier it tried to promote an offering at a value of 2 billion dollars but withdrew due to the lack of demand. In the last 12 months, the stock lost nearly 80% of its value, trading at $301 million.
Kaltora has developed systems for uploading and viewing video content. It is a kind of corporate YouTube that includes training videos for employees, an educational and teaching portal used by major universities in the United States, and a system for streaming video from multi-participant meetings and virtual conferences. The company's infrastructure is also used by entities such as Cellcomtv, and in addition, Kaltora sells its customers tools for developing video solutions themselves that will be adapted to their needs.
Panopto competes with Kaltura mainly in the field of corporate video and solutions for the field of education. The latest tender offer that was submitted sets a price of 3 dollars per share of Kaltora. The previous offer was in the range of 3-2.75 dollars per share - so Panopto has improved the conditions by now choosing the upper end of this range. The offer reflects a premium of 44% over the average rate in the last 30 days, and of 52% over the average of the last 60 days. Panopto points out that this price is also higher than the target price recently given by Goldman Sachs Bank to Kaltora in its review of the stock: 2.5 dollars.
However, Panopto claims that the premium is even greater, and that it was only thanks to it that the Kalatura share even reached its last gate. According to them, the body financing the purchase, the K1 Fund, collected from July 7 and for two weeks more than 4.8 million shares of Kalatura in the market - meaning that the demand that came from it raised the price. Before this move, Kaltora shares were trading at $1.72, and therefore the $3 offer reflects a 75% premium over that price.

She transferred the shares that K1 bought to a legal entity called Classroom Aggregator that may be related to Panopto, which already at the beginning of June and until the end of the month began to buy shares of Klatura on her behalf. Now Classroom Aggregator owns 6.9% of Kaltora shares. "As a step to express our seriousness about the offer, K1 bought a significant stake in Kaltura and is now one of the largest shareholders," Panopto wrote in a letter to Kaltura's management.
Panopto added: "We still believe that Kaltura is an attractive deal that, together with Panopto, will create an impressive video player, which can bring unparalleled value and help organizations improve the way they manage their video content and the viewer experience of this content."
In the first quarter of this year, Kaltora generated a negative cash flow from current operations in the amount of 19.5 million dollars and at the end there were 119.5 million dollars in the coffers. Revenues in the period increased by 10.6% to 42 million dollars. The adjusted EBITDA amounted to $8.4 million, and the accounting loss amounted to approximately $17 million.



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