- PayGroup (PYG) is planning to raise $16 million to help it purchase 100 per cent of Integrated Workforce Solutions (IWS)
- The payroll and human capital management company will pay $15.3 million to acquire the cloud-based workforce management platform
- PYG plans to tap investors for $15 million via a placement, while shareholders are able to take place in a $1 million share placement plan
- Under the capital raise, more than 26 million new shares will be issued at 56 cents per share — a discount of 11.1 per cent on the company’s last closing price
- Additionally, PayGroup has advised it’s on track to exceed its annualised recurring revenue forecast and contract guidance
- Shares in PYG are trading up 2.38 per cent at 64.5 cents per share
PayGroup (PYG) is planning to raise $16 million in additional capital to help it fund the purchase of Integrated Workforce Solutions (IWS).
The payroll and human capital management company has agreed to pay $15.3 million to acquire 100 per cent of IWS.
The cloud-based workforce management platform has more than 1000 customers on its books and processes around 400,000 payslips per annum.
In order to fund the acquisition, PayGroup plans to tap investors for $15 million as part of a non-underwritten, two-tranche placement.
Under the raise, more than 26 million PYG shares will be issued at 56 cents per share — a discount of 11.1 per cent on the company’s last closing price of 63 cents.
Shareholders will also be offered a chance to top-up their holdings, with the company planning to launch a $1 million share placement plan next month.
“We are pleased to announce the acquisition of IWS, a highly strategic expansion into the franchise vertical, broadening our capabilities and significantly increasing our cross-selling opportunities,” Managing Director Mark Samlal said.
“IWS strengthens PayGroup’s position as a leading provider of mission-critical payroll and scalable HCM solutions as we continue to achieve greater scale,” Mark added.
In addition to the capital raise and acquisition news, PayGroup has advised it’s on track to exceed its annualised recurring revenue (ARR) forecast for FY21.
The company believes its ARR will top $21.5 million at the end of the financial year, up $1 million from the previous forecast.
The finance stock also expects to beat its contract guidance for the 2021 financial year by around $3 million, to total $13 million all up.
Shares in PayGroup are trading up 2.38 per cent at 64.5 cents per share at 3:42 pm AEDT.