Join our daily newsletter At The Bell to receive exclusive market insights
- ELMO Software (ELO) has launched a $70 million placement to accelerate its growth initiatives and fund acquisition opportunities
- Approximately 10 million shares will be issued at a price of $7 per share
- Once the placement has been completed, the ELMO will also conduct a share purchase plan to raise up to $20 million
- Shareholders will be able to purchase up to $30,000 worth of shares
- The software company also reaffirmed its FY20 guidance, with earnings before interest, taxes, depreciation and amortisation predicted to lie between $50 and $52 million
- ELMO has entered a trading halt, with shares last trading for $7.91 each
ELMO Software (ELO) has launched a $70 million placement to accelerate its growth initiatives and fund acquisition opportunities.
Once the placement has been completed, the software company will also conduct a share purchase plan to raise up to $20 million.
“During these unprecedented times, the rapid adoption of remote working has led to increased reliance on the ELMO platform,” Co-Founder and CEO Danny Lessem commented.
“We see an opportunity to accelerate the implementation of our growth strategy through strategic investment and targeted acquisitions for complementary technology, market share and operations for further U.K. expansion,” he said.
“The capital raising will provide enhanced financial flexibility to leverage these opportunities and emerge from the current environment in a position of significant strength,” he added.
Placement
For the placement, approximately 10 million shares will be issued at a price of $7 per share.
This represents an 11.5 per cent discount to the last closing price of shares on May 8, which was $7.91 per share, and an 8.8 per cent discount to the five-day volume-weighted average price from that same date.
The shares are expected to settle on May 15 and be allocated on May 18.
Share purchase plan
Following the placement, ELMO will undertake a share purchase plan to raise an additional $20 million. However, the company has the right to increase the share purchase plan or scale it back.
Shareholders will be able to purchase up to $30,00 worth of shares. Shares will be priced lower than the placement.
The share purchase plan will open on May 19, close on June 1, and shares will be allocated on June 9. Trading can then begin on June 10.
ELMO has also reaffirmed its FY20 guidance, with earnings before interest, taxes, depreciation and amortisation to lie between $50 to $52 million.
ELMO has entered a trading halt, with shares last trading for $7.91 each in a $595 million market cap.
