News: Stargroup Limited to be cash flow positive following acquisition

Stargroup Limited (ASX:STL), formerly iCash Payment Systems, is poised to become cash flow positive following the acquisition of a 109 automatic teller machine (ATM) network from Cash Plus Australia Pty Limited for $6.5 million.

The acquisition will increase the company’s to 230 machines and add at least $1.3 million to its EBITDA.

Consideration will be paid equally in cash and shares priced at $0.04 each with completion expected in November 2015.

In addition, the acquisition will be part-funded by a fully underwritten non-renounceable 2 for 5 rights issue to raise $3 million with provision for oversubscriptions for a further $1 million worth of shares.

This includes 1 free attaching option exercisable at $0.05 expiring in three years for every two shares subscribed.

Completion of the acquisition is subject to the following conditions:

- Stargroup completing due diligence to its satisfaction on the ATM network;
- Stargroup and Cash Plus obtaining all necessary shareholder and regulatory approvals for the transaction;
- Stargroup completing the capital raising;
- ASX advising that the Consideration Shares are not subject to escrow restrictions; and
- Stargroup and VComms entering into a Service Agreement in respect of the VComms modems.