Join our daily newsletter At The Bell to receive exclusive market insights
- Credit Clear (CCR) will acquire fellow debt recovery business ARMA Group for $46 million in a cash and scrip deal
- The company will fund the purchase through a $29.5 million institutional placement to investors and share purchase plan (SPP) for eligible shareholders
- The acquisition of ARMA Group is expected to add more than 400 customers to its roster and grows revenue by 140 per cent to $26.5 million
- Credit Clear’s placement has already received firm commitments to raise the full $25.5 million on offer, with new shares worth 40 cents each
- Credit Clear has come out of a trading halt and is trading down 12 per cent at 47 cents per share
Credit Clear (CCR) has announced plans to acquire fellow debt recovery business ARMA Group for $46 million in a cash and scrip deal.
The company has come out of a trading halt and announced the acquisition, with the consideration consisting of 60 per cent cash and 40 per cent scrip.
The purchase will be funded through a $29.5 million institutional placement and a share purchase plan to eligible shareholders.
The ASX-lister wants to acquire ARMA Group so it can have access to the debt recovery company’s more than 400 customers.
The purchase is also expected to grow Credit Clear’s revenue by 140 per cent to $26.5 million, while its earnings before interest, taxes, depreciation and amortisation (EBITDA) would total $3.9 million.
Credit Clear CEO David Hentschke said a combined ARMA-Credit Clear business would have a market-leading reach across Australasia.
“The ARMA acquisition provides us an opportunity to deploy this leading digital technology across ARMA’s significant existing client base and to win considerable new business together,” he said.
“It will accelerate top line growth and build on the tremendous success Credit Clear has achieved in expanding the use of the digital platform after acquiring Credit Solutions in 2019.”
Credit Clear has already received firm commitments to raise the full $25.5 million under the institutional placement, with new shares priced at 40 cents each.
The SPP will offer shares at the same price as the placement, with the plan to open on December 20 and close on February 4.
Having come out of the trading halt, Credit Clear is trading at 47 cents per share, down 12 per cent at 2:50 pm AEDT.
