Gentrack Group Limited (NZX/ASX: GTK) advises that it intends to raise approximately NZ$90 million of new equity through a fully underwritten accelerated entitlement offer (“Offer”).
On 21 June 2018, Gentrack announced that it had entered into an agreement to acquire Evolve Parent Limited and Evolve Analytics Limited (Evolve) for £23.0 million (NZ$44.2m). The acquisition of Evolve enhances Gentrack’s ability to provide highly innovative, value-add solutions to UK energy utilities, while Gentrack provides a base for Evolve’s product expansion into new markets.
The acquisition of Evolve was completed on 29 June 2018 and has increased Gentrack’s debt to approximately NZ$90m. Proceeds raised through the Offer will be used to pay down Gentrack’s existing bank debt, providing funding capacity to support future acquisition and growth opportunities.
Gentrack has completed four strategic acquisitions since March 2017 across both the Utilities and Airports divisions, which have broadened its compelling product offering.
Gentrack continues to investigate potential acquisition opportunities that it may seek to pursue, which would expand its product offering, strengthen its market position and grow into new geographies. These potential acquisitions are aligned with Gentrack’s existing business and growth strategy. The Offer provides Gentrack with capacity to pursue these acquisition opportunities, in addition to its existing organic growth opportunities, while maintaining a conservative debt position.
The Board has concluded that undertaking an accelerated entitlement offer to raise new equity is the best option for the company and its shareholders, and provides an equal opportunity for all eligible shareholders to participate.
Under the Offer, Eligible Shareholders are entitled to acquire 1 New Share for every 5.77 Existing Shares held as at 9.00pm (New Zealand time) on the Record Date of Friday, 6 July 2018, at an Application Price of NZ$6.19 per New Share.
The Application Price reflects an 11.6% discount to the last close price on the NZX of NZ$7.00 and a 10.0% discount to the theoretical ex-entitlement price of NZ$6.88 as at 3 July 2018.
Gentrack’s largest shareholder, Hg, intends to subscribe for its full entitlement. Gentrack Chair, John Clifford, intends to subscribe for NZ$2.5m worth of new shares under the Offer.
The Offer has been underwritten by Deutsche Craigs Limited and UBS New Zealand Limited.
Further details of the Offer are set out in the Appendix to this announcement and in the Investor Presentation and Offer Document lodged with the NZX and ASX today. The Investor Presentation and Offer Document contain important information including foreign selling restrictions with respect to the Offer.
 Deutsche Craigs Limited is a wholly owned subsidiary of Craigs Investment Partners Limited (CIP). The role of the Underwriter may be performed by Deutsche Craigs Limited or CIP (as the NZX Participant firm) or any of their affiliates, successors and assigns, as appropriate, and those entities shall have the rights and benefits of the Lead Managers or the Underwriters.
Read more on the NZX website.
Click on the links below to view relevant documentation.