Salmat kicks off $15m fundraising drive to close Microsourcing acquisition
Just weeks after reporting a decline of $47m in revenue Salmat has launched a drive to raise $15m through an entitlement offer.
The move will see the marketing services company offer 35 million shares at 43 cents each to help fund the acquisition of the final 50% of Microsourcing International.
Salmat acquired the remaining 50% stake in the Philippine-based business in August for $US24.1m.
The business has become an important cog in Salmat’s international strategy, contributing $64.1m to Salmat’s 2016 financial year revenue and reporting 35% annual compound growth since Salmat first invested in the business in 2014.
The company, which began life as a catalogue delivery specialist, is undergoing a major restructure as it sheds a number of underperforming divisions.
The restructure saw revenue drop from $498.1m to $450.8m in 2016 with the company reporting a net loss after tax of $6m.
Salmat chairman, Peter Mattick, said at the time that the restructure would reset the business for the future and the benefits were already being seen.
CEO Craig Dower said the fundraising was a sensible way to close the acquisition.
“Capital raisings are a common vehicle for funding acquisitions, and after exploring other options, was deemed the most suitable approach,” Dower said.
“As a business, we are more match fit than we have been for many years. Microsourcing is an important part of Salmat’s growth strategy and makes a positive contribution to both revenue and profit. We have the strategic priorities in place expected to drive sales and profitable revenue in FY17.”
The fundraising will see shareholders offered one new fully-paid ordinary share for every 4.7 shares held.
Salmat shares were trading at 48 cents when suspended.
