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Chembio Shares Down as Firm Prices New $16M Public Offering

NEW YORK (360Dx) – Chembio Diagnostics today announced the pricing of a public offering that is expected to bring in $16 million.

The firm said it has priced the offering of 2,370,435 shares of its common stock at $6.75 per share, well below its Wednesday closing price on the Nasdaq of $8.22.

Its shares were down more than 11 percent to $7.26 in early morning trading.

Craig-Hallum Capital Group is the managing underwriter for the proposed offering. Chembio granted the underwriter a 30-day option to purchase up to an additional 355,565 shares.

Chembio said it intends to use the net proceeds from the offering to fund its proposed $5.5 million cash acquisition of OpTricon, a privately held German developer and manufacturer of handheld analyzers for rapid diagnostic tests, announced on Oct. 22. Further, Chembio anticipates using the proceeds to support its growth strategy, including broadening US manufacturing automation and expanding and improving facilities, and for other general corporate purposes.

On the day that it announced the proposed acquisition, Chembio said that it had commenced an underwritten public offering of $25 million of its common stock. But, just a few days later, the firm pulled the plug on that offering, causing a jump in its share price.

The current public offering is expected to close on Nov. 5.