Shares went into a trading halt on Monday morning ahead of an announcement.
Industrial parts supplier Coventry Group is set to kick off a capital-raising to fund the acquisition of New Zealand-based metal fasteners manufacturer Steelmasters, Street Talk understands.Sources said the raise will be structured as a $25 million placement plus a $2 million share purchase plan. The balance of the $42 million acquisition will be funded with debt. Shares will be priced at $1.45 per share – a skinny discount to the last close of $1.
The acquisition is being pitched as highly complementary for Coventry, making it a clear market leader in New Zealand. Management is hoping it will benefit as the economy, Coventry has consistently grown revenue and earnings for the past seven years. The company declared a 5.4 per cent increase is group sales in its last half year result, boosted to $185.3 million. Underlying EBITDA rose 18.1 per cent to $9.8 million.
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