BluePhoenix Solutions (Nasdaq: BPHX) is raising $35 million through a private stock placement.
The company is selling 2 million shares to institutional investors at $17.50 per share.
Wall Street reacted negatively to the news, with shares dropping nearly 12 percent or more than $2 per share, to $16.60 in trading late Monday.
Investors also received 800,000 warrants for shares exercisable at a price of $21.88.
BluePhoenix, which is based in Israel and has its North American headquarters in Cary, develops legacy modernization solutions.
The company said the funds would be used for repayment of debt, potential acquisitions and working capital. The transaction is expected to close on or before Nov. 26.
