Shares of Mama’s Creations Inc. (NASDAQ: MAMA) fell 8.1% in after-hours trading Monday after the company disclosed an underwritten public offering of its common stock. The company said the offering would be composed entirely of shares issued by Mama’s Creations.
Under the terms disclosed, the underwriters will have a 30-day option to buy up to an additional 15% of the shares at the public offering price, less underwriting discounts and commissions. The company stated that net proceeds from the sale would be used to fund working capital and for general corporate purposes. Those purposes may include financing acquisitions of businesses or assets that would be complementary to Mama’s Creations’ existing operations.
Company management was careful to note that it currently has no arrangements or commitments with respect to any potential acquisitions. The filing also made clear that the proposed offering is conditioned on market and other factors, and that there is no assurance the transaction will be completed or that the ultimate size or terms of any offering will match what has been proposed.
William Blair & Company, L.L.C. and D.A. Davidson & Co. are serving as lead book-running managers for the offering. Craig-Hallum Capital Group LLC, Lake Street Capital Markets, LLC and Roth Capital Partners, LLC are listed as co-managers.
Mama’s Creations produces and markets fresh deli prepared foods. Its products are sold nationally in more than 12,000 grocery, mass, club and convenience store locations. The company’s portfolio includes a range of fresh prepared foods and builds on the MamaMancini’s brand heritage in Italian foods.
The company’s statement and the market reaction underscore the immediate investor sensitivity to equity offerings, particularly when the issuer is positioning proceeds for general corporate purposes and potential acquisitions without current commitments. The proposed transaction remains contingent on market conditions and other factors, so outcomes remain uncertain.
Contextual note: The above reflects details disclosed by Mama’s Creations about the proposed offering and the subsequent market reaction. The offering’s completion, final size and terms are not guaranteed.