http://www.proactiveinvestors.com.au/companies/news/55427/red-gum-resources-jets-into-high-end-travel-and-leisure-industry-55427.html
Red Gum Resources (ASX:RGX) is likely to trade higher today after entering into a binding heads of agreement to acquire high-end leisure and travel company, Holiday Planet.
Holiday Planet is debt free, and has been operating profitably since 2001, with annualised sales exceeding $35 million per annum for the past 3 years.
This is an empowering acquisition for RGX, which is currently capitalised at just $4 million, with $2.6 million in cash.
Holiday Planet is one of the largest privately owned leisure and travel companies in Australia, and provides RGX with 13 years of profitable trading history.
In exchange for RGX acquiring Holiday Planet, RGX will issue 18.75 million shares at $0.20 each to Holiday Planet shareholders, together with a cash consideration of $1 million.
It focuses the majority of its business in the higher margin leisure industry, and is one of only a handful of Diamond Agents in Australia for P&O Princess Cruises, and acts as a one-stop-shop with websites across all key sectors of leisure travel including holidays, cruise, flights and hotels.
Holiday Planet focuses the majority of its business in the higher margin leisure industry, and is one of only a handful of Diamond Agents in Australia for P&O Princess Cruises.
A prospectus offering of $3 million at $0.20 per share will be offered to complement RGX's existing bank balance, with a priority share pool of $1.5 million made available to Holiday Planet’s 50,000-plus customers.
The new capital proposed to be raised will be used to assist Holiday Planet to expand further into the East Coast domestic market as well as into the Singaporean cruise and leisure travel segment.
Holiday Planet also intends to expand investment in information technology to allow virtual reality search, transaction, and ticket enhancements; and to develop new booking engines in the high volume leisure travel areas of Asia, North America, the South Pacific and Europe.
The company plans to engage in industry consolidation to become the preferred high end luxury travel brand retailer.
The acquisition will also bring in a strengthened Board and management team with over 150 years of experience in the high margin leisure market segment; and notably, the board is currently in advanced negotiations with additional travel groups as part of a travel aggregation strategy.
Settlement is subject to satisfaction of a certain conditions under the Agreement, including recompliance with ASX listing rules and satisfaction of mutual due diligence.
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