Marlborough Software closes $2M in equity

Marlborough Software Development Holdings Inc. (MSDH) (OTCQB:MBGH) has said it has closed a private equity investment totaling $3.5 million from two investors, MSDH board member and former Bitstream CEO Amos Kaminski and Israeli asset management firm Altshuler Shaham Group. MSDH does business under the Pageflex brand name, which provides marketing and automated print solutions enabling personalized printed and online marketing messages.

The investment is scheduled to occur in two tranches, the first in the aggregate amount of approximately $2 million of preferred stock and 2,985,070 warrants, which closed yesterday, and a second tranche of $1.5 million of the same securities will occur at a second closing in 2013 if certain performance criteria specified in the investment documents have been achieved by the end of the second quarter of 2013.

MSDH had previously been a wholly-owned subsidiary of Bitstream. Kaminski was the Bitstream interim CEO from May 2011 until March of this year when the company was acquired by Monotype Imaging Holdings Inc., at which time MSDH was spun off from Bitstream. Kaminski had been chairman of the board of Bitstream since August 2010 and a director since 1985. He had also served as Bitstream’s chairman of the board from 1991 through 1996.

In August, MSDH announced it was restructuring its staff in response to the weak economy, reducing its overall workforce by 26 percent. CFO Jim Dore told Mass High Tech that this investment will not be used for reducing debt.

“We’re really focused on developing Pageflex,” Dore said. “This investment is something we wanted to do to show that the company is committed to going forward with developing the product.”

Pinhas Romik, president and CEO of MSDH, said the company expects the investments will strengthen its financial position and reassure shareholders, partners, employees, and customers that MSDH has the resources it needs to support growth. “We are extremely grateful for the confidence which these two investors have shown in us at a pivotal moment,” Romik said in a written statement. “We intend to do all we can to meet the expectations of these investors and to increase our value for the benefit of all of our shareholders.”

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