- Generation Development Group (GDG) is aiming to raise up to $35 million to acquire a 37 per cent stake in Lonsec Holdings
- The capital raise will include a fully underwritten placement and a partially-underwritten, one-for-6.7 accelerated non-renounceable entitlement offer
- GDG aims to raise $21.9 million under the placement and up to $13.1 million under the entitlement offer – shares under both components will be priced at 70 cents each
- While majority of the funds will go towards the acquisition, the money will also be used to develop a new annuity product
- The new product will address longevity risks, which is the risk of someone outliving their savings
- GDG’s shares remain locked up and will remain so until Monday, September 21 at the latest
- Company shares last traded for 84 cents per share on September 16
Generation Development Group (GDG) is aiming to raise up to $35 million to acquire a 37 per cent interest in Lonsec Holdings.
Lonsec is a leading research firm that provides ratings to fund managers, superannuation funds, advisory groups and platforms.
The capital raise will comprise a fully underwritten placement and a partially-underwritten, one-for-6.7 accelerated non-renounceable entitlement offer.
Under the placement, GDG will raise up to $21.9 million to institutional investors at an offer price of 70 cents per share. The entitlement offer aims to raise up to $13.1 million, partially underwritten to $8.1 million.
GDG expects to issue up to 50 million new ordinary shares for the capital raising.
The entitlement offer will allow eligible shareholders to subscribe to one new GDG share for every 6.7 existing shares.
Of the $35 million, $20.1 million will be used for the acquisition of Lonsec Holdings, while the remaining funds will be used to develop a new annuity product.
The acquisition is expected to be completed in mid-October, as long as it satisfies closing conditions.
The new product is to address the longevity risk, which is the risk of someone outliving their savings.
GDG’s Chairman Rob Coombe is excited for the company to embark on this significant phase of growth.
“This investment in Lonsec will provide GDG with a highly strategic foothold in an attractive market niche of the financial services and wealth management market,” he said.
“We believe that Lonsec is well positioned for future growth supported by strong industry and regulatory tailwinds and will provide access to resilient recurring revenue streams from its core research offering,” he added.
GDG entered into a trading halt this morning, meaning shares will be frozen until Monday, September 21, or when the company releases the results of the capital raise.
Company shares last traded for 84 cents per share on September 16.