Capital raising and strategic stake expands growth strategy
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Good morning, Today Novatti launches a new, expanded growth strategy with a $45m capital raising. This will enable Novatti to:
Increase our presence in existing markets
Enter new markets
Pursue a range of acquisition opportunities
Importantly, this capital raising also enables Novatti to acquire a strategic stake in a leading accounting software provider, Reckon Limited (ASX:RKN). With revenue of more than $75 million, EBITDA of more than $32 million, and a rapidly growing pool of more than 100,000, cloud-based customers, we believe this stake in Reckon presents an attractive investment for Novatti. There is a tight synergy between business automation software and payments processing. For software clients, this combination drives increasing productivity. For providers, it drives a strong economic return based on cross selling. Novatti’s strategic investment in Reckon will open up new opportunities to explore synergies and deliver growth in the Novatti business. The capital raising received strong support from highly regarded Australian and offshore institutional investors. As part of this capital raising, we are also delighted to announce a share purchase plan of up to $5m at $0.55 per share for our existing shareholders. Novatti has a strong track record of delivering growth for its shareholders from funds raised. These funds enable us to build and expand on Novatti’s business. For example, since Novatti undertook its last substantial capital raising in the June FY20 quarter, quarterly sales revenue has increased by 33%. At the same time, Novatti’s market capitalisation has also increased by more than 200%.
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This capital raising and strategic acquisition marks another important milestone in Novatti's journey as we pursue greater growth for our shareholders. A copy of the ASX release and accompanying presentation with full details of this capital raising can be seen by clicking below:
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I thank you for your ongoing support of Novatti and look forward to using these funds to achieve further growth.
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Kind regards,
Peter CookManaging DirectorNovatti Group Limited
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NOV Price at posting:
58.0¢ Sentiment: Buy Disclosure: Held
