- Classifieds business operator Frontier Digital Ventures (FDV) has successfully tapped institutions for a neat $92.6 million
- Frontier raised just over $63 million through a share placement and just over $29 million in a one-for-nine entitlement offer
- New shares were priced at $1.25 each, representing a discount of over 20 per cent to Frontier’s last closing price
- A retail entitlement offer opened today which is expected to bring in $7.4 million on the same terms as the institutional offer
- The company will use the funds to buy three businesses, announced last week, and make sure it has a flexible balance sheet for future strategic decisions
- Shares in Frontier closed 3.51 per cent lower today and worth $1.51 each
Classifieds business operator Frontier Digital Ventures (FDV) has successfully tapped institutions for a neat $92.6 million.
The company raised the funds through a share placement and a one-for-nine entitlement offer, both of which had new shares priced at $1.25 a pop.
Frontier said the placement was significantly oversubscribed, pulling in $63.4 million with a take-up rate of 91 per cent from institutional investors. Similarly, the entitlement offer received “strong support”, according to the company, and raised $29.2 million.
The $1.25 price tag represents a 20.1 per cent discount to Frontier’s last closing price before the raise was announced of $1.56 per share.
For mum and dad investors wanting to take advantage of the discount, the retail segment of the entitlement offer opened today. Retail investors can buy new shares at the discounted price on the same terms as the institutions, with the offer closing on Thursday, October 15.
All up, the retail offer is expected to raise $7.4 million, taking the total proceeds from the capital raise to $100 million.
Frontier Founder and CEO Shaun Di Gregorio said the company is grateful for the institutional support so far shown from new investors.
“This capital raising has further strengthened our share register through the addition of 15+ high quality domestic and international funds who we believe are highly aligned with our long-term value creation strategy,” Shaun said.
Why the raise?
A big chunk of the new money — $56 million, to be exact — will go towards the purchase of three classifieds businesses: Fincaraiz in Colombia, Avito in Morocco and Tayara in Tunisia.
The buys are expected to have a major impact on company revenue and increase Frontier’s market presence in the global classifieds sector.
The remaining $44 million will go towards general growth capital and transaction costs, and ensure the company has a flexible balance sheet for future strategic decisions.
Shares in Frontier traded for the first time since the raise was announced today and declined slightly. The company closed 3.51 per cent lower with shares worth $1.51 each.