Welcome to the Market Herald Deal Room’s Friday review of the week’s capital raising activity.
In a significant capital raise this week, Nitro Software (NTO) announced it had raised most of $140 million through a placement, with the last $23 million to be sourced via a retail entitlement offer opening next week.
Nitro’s raise is to fund the acquisition of e-sign software-as-a-service business ‘Connective’ in a $110 million deal.
Nitro co-founder and CEO Sam Chandler said it would boost the company’s existing ‘simple’ e-signing offerings.
“What Connective brings to the table is advanced and enterprise high-trust e-signing,” he said.
“It is one of the hottest and highest growth categories in software today, and, around the world workplaces are scrambling to get every kind of paper-based workflow digitised, so I think it’s very exciting for our growth story.
“The 10-year compound annual growth rate in e-signing is expected to be around 30 per cent per year over the next decade.”
NTO has a market cap of $737.6 million and share trade opened at $3.74 today. The retail entitlement shares will be offered from next Tuesday at $3.43 each.
Meanwhile, listed investment company Plato Income Maximiser (PL8) was raising $121 million, even though there was no pressing need for the funds. The funds will be reinvested into the share market.
Its $71 million placement was filled and Plato opened a $50 million share purchase plan (SPP) with shares issued at $1.11 each.
Plato Director Dr Don Hansom claims the raise was done to meet strong demand for Plato shares due to its monthly dividends.
He said the raise price equated to the net value of the net tangible assets managed by the company, but the share price has since dropped back.
“It’s actually fair to offer those shares at NTA because that’s the value of the assets you’re buying,” he said.
“I think the share price will go back up again when the SPP closes, because I think there are still a lot of people looking for a home for money with regular income and we’re certainly paying some pretty good dividends. We’re unique in that we pay monthly fully franked dividends.”
Plato Income Maximiser Director Dr Don Hansom is also the Managing Director of over-arching Plato Investment Management.
PL8 has a market cap just below $571.5 million. The share price has dropped since the raise, opening at $1.16 today.
Smart locking technology company TZ (TZL) has secured significant contracts with large blue chip customers here and in the US.
To follow mandates set by TZ’s new CEO Mario Vecchio, the company’s raised just under $3.5 million to clear debt and provide a capital buffer in an environment where TZ’s supply chain from Taiwan is tight.
“I wanted zero debt, and then to expand the company the way I want to expand it,” he said.
“While there’s a tight global supply chain, we want to make sure we’ve got the right capital behind us to be able to take advantage of purchasing in tight markets of global supply if we need to.”
Investors have reacted positively to the news, with the company’s share trade opening at 13.5 cents today.
The full interview with TZ Limited’s Mario Vecchio will be uploaded here, in The Market Herald Deal Room, on Monday.
The Deal Room also explored capital raising this week by Traffic Technologies (TTI), which provides traffic and transport control systems to customers, including governments.
Through a placement of more than $2 million and a $10 million rights issue, it wants to pay down debts that are locked in at interest rates of about 19 per cent.
Managing Director Con Liosatos said management also wanted to be cashed up for growth acquisitions.
“The debt that we want to extinguish is approximately around the $10 million mark and most of that interest is at 19 per cent,” he said.
“We’re in a position where we can see light and visibiity on what we need to do as a company, and the position is now where we can extinguish that debt.”
Traffic Technologies has a market cap of $15.5 million and shares last traded at 2.8 cents. The rights issue shares are priced above that, at 3 cents.
This week there were five market debuts on the ASX.
One of these was global hotel commerce platform provider SiteMinder (SDR), which charged onto the ASX in unicorn-style, gaining some 40 per cent in early trade.
SiteMinder raised $627 million through the IPO process, and Managing Director and CEO Sankar Narayan said he wasn’t surprised the stock opened strongly.
“We have confidence,” he said.
“The work we have been doing during Covid with new products and new launches over the last 15 months, it gives you that conviction about the opportunity that’s ahead – the team that we have within the company, the customers that we have to be able to drive long term growth — I’m optimistic about the future.”
SiteMinder’s shares opened a little lower this morning, just below $7, although it was back up around $7.15 mid-session.
The Market Herald Deal Room also explored Austral Resources (AR1) which had a slow start to trade over concerns around potential legal action by a former shareholder who sold his stake in the company.
We interviewed those behind companies which will debut later this month: Racing and Sports, which will IPO under the name RAS Technology Holdings (RTH) and has raised $29 million in the process; and Australian copper and gold explorer Cooper Metals (CPM), which has raised $4.8 million.
For more information on these and other ASX-listed companies, head to the search tab on this website.