(By Balaseshan) Ellie Mae Inc. (NYSE:ELLI), which hosts an electronic mortgage origination networks, said the company and certain directors intend to sell roughly 3.1 million shares of its common stock in a proposed offering.
The company plans to offer, subject to market and other conditions, 3 million shares of its common stock. Certain of Ellie Mae's directors and executive officers also intend to offer 101,638 shares of common stock.
In addition, Ellie Mae expects to grant the underwriters a 30-day option to purchase an additional 465,245 shares of common stock to cover over-allotments, if any.
The company estimates that the net proceeds that it would receive from the sale of 3 million shares of common stock in this offering would be about $46.1 million ($53.3 million if the underwriters exercise their over-allotment option in full) at an assumed Friday's stock closing price of $16.29 per share, after deducting underwriting discounts and commissions as well as estimated offering expenses.
Ellie Mae plans to use the net proceeds from this offering for working capital and general corporate purposes, which may include the acquisition of, or investment in, technologies, solutions or businesses that complement the company's business.
Ellie Mae will not receive any proceeds from the sale of common stock by the selling stockholders.
William Blair & Co. L.L.C. and JMP Securities LLC are acting as joint book-running managers of the offering. Needham & Co. LLC, Oppenheimer & Co. Inc., D.A. Davidson & Co. and Wunderlich Securities Inc. are acting as co-managers of the offering.
The number of shares of common stock outstanding after this offering is based on 21.59 million shares outstanding as of March 31, 2012, plus 3 million shares to be sold by the company in this offering.
Mortgage lending volume is expected to be flat or lower in 2012 and 2013 than it was in 2011 due to various economic factors, including the anticipated increase in mortgage interest rates, which could adversely affect the company's business.
ELLI is trading down 4.85% at $15.50 on Monday. The stock has been trading between $3.46 and $17.62 for the past 52 weeks.