Software company Gentrack has announced a discounted rights issue to raise $90 million as it moves to pay down debt from recent acquisitions.
The deal offers shareholders one new share for every 5.77 shares they already own at a price of $6.19 a share.
The offer price represents a 12% discount to the last closing price of Gentrack shares of $7.
A trading halt was put in place this morning and will remain until Monday, July 9.
The record date for the offer entitlement is this Friday, July 6.
Gentrack’s biggest shareholder Hg Capital, which this week invested in Orion Health’s Rhapsody business, has agreed to subscribe for its full entitlement, Gentrack said.
UK and Germany-based HgCapital bought into Gentrack in March last year in a $35.5 million transaction involving the purchase of 9.5m new shares at $3.72 a share.
Gentrack chairman John Clifford has said he will subscribe for $2.5m of shares under the offer.
Interests associated with Mr Clifford own 9.15m shares, a 10.9% Gentrack stake allowing an entitlement under the offer of 1.59m shares, or $9.8m worth.
The share offer is underwritten by Deutsche Craigs and UBS.
Gentrack, which supplies software for running utilities such as energy companies and airports, has acquired four companies since early last year at a total price of about $139m.
The first and biggest of those was Junifer, acquired in April last year for $75m.
The most recent was Evolve Analytics, acquired in June for an enterprise value of $44m.
Evolve specialises in providing software and services to the UK energy sector.
Gentrack said it is continuing to look at potential acquisitions.
“The offer provides Gentrack with capacity to pursue these acquisition opportunities, in addition to its existing organic growth opportunities, while maintaining a conservative debt position.”
In May Gentrack reported a profit of $8.4m for the six months to March 31, from revenue of $52m.
Debt at balance date, before the Evolve acquisition, was $44.7m.
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