- Experience Co (EXP) is acquiring outdoor adventure company, Trees Adventure, for up to $46.9 million
- EXP says the deal provides increased exposure in the domestic leisure market with attractive financials and portfolio growth potential
- The company is funding the buy with a $55 million entitlement offer at 33 cents per share
- EXP remains in a trading halt and expects to come out of it by October 4
- Company shares last traded at 36 cents on September 29
Experience Co (EXP) has announced an acquisition and a $55 million equity raise.
The adventure tourism company entered a trading halt this morning which said it was in relation to a pro-rata accelerated non-renounceable entitlement offer. Soon after, the details were released.
Experience Co will acquire Trees Adventure for up to $46.9 million which includes an initial payment of $40.4 million and potential deferred payments of up to $6.5 million over the next three years.
Trees Adventure is an Australia-based operator of zip-lining and rope obstacle courses in tree canopies. Trees Adventure currently operates 14 adventure parks across five states and two further parks are under development.
According to EXP, the deal expands its presence in the domestic leisure market and improves the long-term quality of its portfolio.
The buy also offers positive financial outcomes including a strong earnings before interest, tax, depreciation and amortisation to cash conversion, and a resilient earnings profile.
EXP CEO John O’Sullivan commented on the acquisition.
“The acquisition of TA continues the strategic reset of the Experience Co business that we commenced with the release of our strategic review in November 2019. With its market leading position, strong brand and growing customer base we are very excited about how this acquisition enhances the Experience Co group.”
The acquisition is expected to be completed by November 30.
To fund the purchase, Experience is raising $55 million through the fully underwritten one-for-33 entitlement offer at 33 cents per share.
The issue price marks an 8.3 per cent discount to the last closing price on September 29 and an 8.5 per cent discount to the 15-day volume-weighted average price.
Trees Adventure’s shareholders will be issued 26.9 million EXP shares at 33 cents each.
Experience expects to come out of the trading halt by October 4.
Company shares last traded at 36 cents on September 29.