- Experience Co (EXP) is acquiring outdoor adventure company, Trees Adventure, for up to $46.9 million
- The company is funding the acquisition through a completed a $51 million institutional entitlement offer with shares issued at 33 cents
- A retail component of the entitlement offer opens on Thursday to raise another $4 million
- EXP says the deal provides increased exposure in the domestic leisure market with attractive financials and portfolio growth potential
- Company shares last traded at 40 cents on October 4
Experience Co (EXP) is funding the acquisition of outdoor adventure company, Trees Adventure, thanks to a completed $51 million institutional entitlement offer, with a retail offer for another $4 million opening on Thursday.
The adventure tourism company 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 said strong support from existing shareholders and new investors provided validation for 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,” he said.
The retail entitlement offer closes on October 19 and the Trees Adventure acquisition is expected to be completed by November 30.
The 33 cent 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.
Company shares last traded at 40 cents on October 4.