The company wants more cash to secure additional supply sources for NAND flash memory and possibly to make acquisitions, according to a filing with the Securities and Exchange Commission. Citigroup and Goldman Sachs are leading underwriters for the offering.

 

If completed, M-Systems expects to have 46.4 million shares outstanding.

The company would be the second provider of NAND flash-memory products to tap the capital markets this month.

 

SanDisk Corp. completed a $1 billion debt offering on May 10.

Based in Israel, M-Systems wants to capitalize on the NAND flash boom as cell phones and other portable devices add more built-in features that let consumers snap pictures, listen to music and download videos. This has increased the need for more data storage in portable devices.

 

Gartner Inc., an independent market research firm, estimates that worldwide NAND flash-memory sales will grow to $24.86 billion by 2010, up from $11.43 billion in 2005.

M-Systems also makes USB flash drives, which are removable storage devices that store digital-data content. Its top customers include LG Corp., Motorola, Inc., Palm, Inc., Samsung Corp. and Sony Ericsson Mobile Communications.

 

M-Systems said that its sales could hit $1 billion this year; that's fast growth for a company that reported sales of $45 million in 2001.

In late-morning trading, M-System shares fell 77 cents, or 2.25%, to $33.39. The stock is up 30% over the past two months.