- Software provider Infomedia (IFM) is undertaking an institutional placement to raise approximately $70 million to speed-up its growth strategy
- Approximately 46.6 million shares will be issued at a price of $1.50 each
- Following this placement, Infomedia will offer all eligible shareholders the opportunity to participate in a share purchase plan
- Shareholders will be able to purchase up to $30,000 worth of shares to raise an additional $15 million
- Infomedia is sitting in-line with its March quarter expectations and the company has seen growth across the parts, services, and data insights sectors
- The company expects revenue for the 2020 financial year to sit between $93 to $95 million, which is an increase of as much as 12 per cent compared to FY19
- Infomedia has ended the day in the grey with shares trading for $1.70 each
Software provider Infomedia (IFM) is undertaking an institutional placement to raise approximately $70 million to speed-up its growth strategy.
Approximately 46.6 million new shares will be issued at a price of $1.50 each. This represents an 11.8 per cent discount to Infomedia’s last closing price of $1.70 on April 22.
This placement is fully underwritten by Merrill Lynch Equities Australia.
Money raised will provide enhanced financial flexibility for Infomedia to maintain its momentum and come out of this challenging environment in a position of strength.
“We believe COVID-19 provides a unique opportunity to fast-track our growth strategy towards acquiring quality assets that leverage our global parts, service and data insights platform with enhanced technology, access to new customers and entry to new geographies,” CEO and Managing Director Jonathan Rubinsztein commented.
“This capital raising puts us in a strong position to take advantage of value attractive and operationally accretive opportunities that will emerge in the current environment, and strengthen our position as one of the few market-leading software service providers in the automotive industry globally,” he said.
Following this placement, Infomedia will offer all eligible shareholders the opportunity to participate in a share purchase plan to raise an additional $15 million.
Shareholders have the opportunity to purchase up to $30,000 worth of shares.
While the price is not yet known, shares will be lower than the price of the placement and have a two per cent discount to the five-day volume-weighted average price up to, and including the closing date.
Jonathan and all Directors will be taking part in the share purchase plan.
The share purchase plan opens on April 30 and closes May 21, and shares will be issued on May 28 and can begin trading on the ASX on May 29.
COVID-19 Update
Before the outbreak of COVID-19, the automotive industry was facing a significant change as companies looked to increase profitability beyond traditional sales.
With the social distancing measures and lockdowns put in place, many car dealerships are struggling in this time.
To make sure the company stays in a strong position Infomedia will be managing costs and cash, pursuing all sales opportunities, and protecting all its staff during this time.
FY20 Outlook
Infomedia is sitting in-line with its March quarter expectations and the company has seen growth across the parts, services, and data insights sectors.
As of March 31, Infomedia had a cash balance of $15.2 million.
The company expects revenue for the 2020 financial year to sit between $93 to $95 million, which is an increase of as much as 12 per cent compared to FY19.
Net profit after tax (NPAT) is expected to be in the range of $18 to $19 million, an increase of as much as 18 per cent on FY19.
“While the future impacts of COVID-19 are very difficult to quantify, we remain confident given the strength of our business due to a diverse global customer base, 95 per cent recurring revenue and strong cash conversion,” Chief Financial Officer Richard Leon said.
“Today’s placement allows us to capitalise on emerging growth opportunities,” he added.
Infomedia has ended the day in the grey with shares trading for $1.70 each.