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Irish e-learning company Riverdeep has announced the placing of 12 million ordinary shares, representing a total value of USD42 million.
The shares were valued at EUR3.87 each at the time of the placement, equivalent to USD21 per American Depositary Share, and were released to global institutional investors.
The placement reduces IBM's holding in Riverdeep from 14 percent to seven percent, according to Ellie McCormack, director of public relations for Riverdeep.
Following the placement, Riverdeep also announced that its main insider shareholders -- IBM, Riverdeep CEO Barry O'Callaghan and Patrick McDonagh -- had signed new 12-month lock-up agreements on their combined holdings. These agreements will not expire before August 2002, meaning that it is unlikely that any significant secondary stock will be placed on the market within the next 12 months.
IBM, O'Callaghan and McDonagh have a combined holding of 35 percent in Riverdeep following the share placement, said McCormack.
The share placement follows Riverdeep's announcement earlier this month that its revenues for the quarter ending 30 June 2001 were up and that the company had achieved profitability ahead of schedule.
Bernie Lardner, an analyst with Davy Stockbrokers in Dublin, said that the share placement is a "strong plus" for Riverdeep.
"It removes concerns about Riverdeep's stock hangover, and it allows Riverdeep to concentrate on its fundamentals," said Lardner. "Riverdeep is still very cheap, it has a relatively fixed customer base, and it has produced very strong results," she added.
"Its business is going very well," she explained. "Its expectations for achieving profitability were for December 2001, so it is six months ahead of expectations." Furthermore, Riverdeep has a strong distribution agreement with IBM, and it is on schedule with its business targets, she added.
Meanwhile, O'Callaghan said that Riverdeep would continue to acquire companies and grow 100 percent every year.
Riverdeep and IBM jointly promote, market, sell and service each other's content offerings as complementary K-12 learning solutions to local US school districts, state education departments and international ministries of education through their strategic alliance.
Riverdeep was founded in 1995 and has joint headquarters in Dublin and Cambridge, Massachusetts.
At 12:01 EST in New York on Tuesday, Riverdeep was up over seven percent, trading at USD24.33.
Riverdeep is at http://www.riverdeep.net.
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