Entropic Eyes $99 Million Haul With Stock Offering

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Entropic Communications, which supplies chips for Multimedia over Coax Alliance home-networking equipment, on Thursday priced a public offering of 10.75 million shares of its common stock at $9.70 per share, to result in net proceeds of approximately $99.1 million after fees and other costs.

Entropic's stock opened up 5% Thursday after the announcement, trading at $10.33 per share, before falling back to close at $9.60 per share (down 2% from the previous closing price of $9.80).

Earlier this month, Entropic raised its revenue outlook for the third quarter of 2010, as major cable and satellite TV providers expand their rollout of multiroom DVR set-tops that use the company's chips. The company expects sales for the quarter ending Sept. 30 to be between $60 million and $61 million, compared with the previous forecast of $51 million to $53 million.

Pay-TV providers that debuted multiroom DVRs with Entropic's MoCA chips in the first half of the year include Comcast, Cox Communications and DirecTV.

Entropic's stock offering is expected to close on or about Oct. 5, 2010, subject to closing conditions. Barclays Capital and J.P. Morgan Securities are acting as the joint book-running managers for the offering and Craig-Hallum Capital Group, Signal Hill Capital Group, Pacific Crest Securities and Merriman Capital are acting as co-managers.

The company has granted the underwriters a 30-day option to purchase up to an additional 1.61 million shares to cover over-allotments, if any. The price to the public in the offering is $9.70 per share, and the underwriters have agreed to purchase the shares from Entropic at a price of $9.2635 per share.

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