ASX-listed IT services provider, Montech (ASX:MOQ), plans to raise $9 million via issuing 327.3 million shares at $0.02.75 per share.
Funds raised under the offer will be used to finance its two recent acquisitions of managed IT services provider, Tetran and SaaS provider, Skoolbag.
Montech non-executive chairman, David Shein, said the capital raising was a significant milestone for the company and will enable it to complete the two acquisitions.
The capital raising will take place in two tranches, with tranche 1 of $4.44 million being placed under the company’s current 15 per cent placement capacity, with the balance of $4.56 million being placed subject to shareholder approval at an extraordinary general meeting on May 9.
Montech expects to complete its Skoolbag acquisition shortly after the issue and allotment of tranche 1 shares on April 1.
The Tetran acquisition is expected to be completed shortly after May 9 where shareholders will be asked to approve the issue of Tetran completion shares and approve to issue and allot tranche 2 shares.
Montech CEO, Nicki Page, said she was focused on delivering growth in earnings both organically and through carefully targeted acquisitions.
Montech is spending $9 million on Tetran ($4 million in cash and 142,857,143 in MOQ shares). The deal also entails a performance-based hurdle to enable the owners to earn up to a maximum of 28, 571, 429 shares, scaled if FY16 EBITDA exceeds $1.65 million.
Skoolbag is being purchased for $3 million in cash and the deal also includes performance-based hurdles to enable the owners to earn up to a further 37,500,000 in MOQ shares per year of FY16 and FY17, based on achieving subscription revenue, customer acquisition and EBIT hurdles.
The two acquisitions will bring another 100 staff across to Montech, building employee numbers to 190.