Join our daily newsletter At The Bell to receive exclusive market insights
- Funtastic (FUN) has signed agreements to purchase the Hobby Warehouse Group for nearly $33 million
- Hobby Warehouse includes Australian eCommerce websites Toys”R”Us, Babies”R”Us, Hobby Warehouse and Mittoni
- To fund this purchase, Funtastic is aiming to raise around $29 million through a fully underwritten placement
- As part of the deal, Hobby Warehouse owner, Louis Mittoni, will be appointed as CEO and Managing Director of the combined group
- However, the purchase will need shareholder approval
- On the market, Funtastic last traded for 6.5 cents on September 28
Funtastic (FUN) has signed agreements to purchase the Hobby Warehouse Group for nearly $33 million.
Hobby Warehouse includes Australian online retailers Toys”R”Us, Babies”R”Us, Hobby Warehouse and Mittoni. The group’s pro-forma unaudited revenue for the 2020 financial year was around $53 million.
To fund the purchase, Funtastic is aiming to raise around $29 million through a fully underwritten placement.
Under the placement, the company will issue around 258 million shares for 11.2 cents per share.
As part of the deal, Hobby Warehouse owner, Louis Mittoni, will be appointed as CEO and Managing Director of the combined group.
However, for the deal to be completed, it will need shareholder approval. The Funtastic Board has unanimously recommended that shareholders vote in favour of the deal.
“It’s been a challenging few years for Funtastic, but, we have finally found the right vehicle to allow our brands and shareholders to accelerate growth within the fast-growing online retailing space,” Chairman Bernie Brookes said.
“The wider range of baby, toy and hobby products that will be distributed via the Funtastic distribution arm will allow us to develop more innovative digital and sourcing strategies to support both our physical and online retail customers in Australia,” he added.
Additionally, Funtastic has signed agreements with one of its major shareholders, Jaszac, to convert its $6 million debt to shares. The outstanding balance of around $3 million will be repaid from the placement.
Jaszac has also indicated it may participate in the placement for a maximum of $3 million.
Once the transaction is completed, Funtastic will have $20.7 million in net cash and an enterprise value of $74 million.
On the market, Funtastic last traded for 6.5 cents on September 28.
