Montech to raise $9 million to help fund acquisitions

Montech to raise $9 million to help fund acquisitions

Significant milestone for the company

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.

Read more: Montech adds to acquisition arsenal with Tetran and Skoolbag

The two acquisitions will bring another 100 staff across to Montech, building employee numbers to 190.

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Tags TetranNicki PageDavid SheinMontech


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