Intelligent Monitoring Group's Strategic Growth Through Acquisition and Equity Raise
IMB (IMB) Share Update November 2024 Thursday 7th
Intelligent Monitoring Group Announces Strategic Acquisition and Equity Raise
Intelligent Monitoring Group Limited (ASX: IMB) has announced a strategic acquisition of Dataline Visual Link Pty Ltd and a $20 million equity raise to fund its growth initiatives.
Instant Summary:
- IMG to acquire 100% of Dataline Visual Link for $7 million.
- Equity raise of $20 million through institutional placement.
- Expected EBITDA growth of 17% for FY25.
- Acquisition to expand IMG's footprint in Western Australia.
Acquisition Details
Intelligent Monitoring Group Limited (IMG) is set to acquire Dataline Visual Link Pty Ltd (DVL) for $7 million, comprising $5 million in cash and $2 million in deferred consideration payable in IMG shares. This acquisition is part of IMG's strategy to expand its footprint in Western Australia and enhance its national platform in the commercial and enterprise sectors.
DVL has shown strong revenue growth and expanding EBITDA margins over the past three years. The acquisition is expected to be immediately earnings per share (EPS) accretive to IMG, with DVL contributing an additional $1.9 million to IMG's EBITDA on a pro-forma basis.
Equity Raise
To fund the acquisition and support further growth initiatives, IMG plans to raise approximately $20 million through an institutional placement. This involves issuing approximately 41.7 million new shares, representing 13.8% of the issued capital. The placement is priced at $0.48 per share, which is a 4% discount to the last closing price.
Additionally, IMG will offer a Share Purchase Plan to eligible shareholders in Australia and New Zealand to raise up to $3 million, providing an opportunity for existing shareholders to participate at the same price as the placement.
Growth and Financial Outlook
IMG has reaffirmed its guidance for FY25, expecting underlying EBITDA to exceed $38 million, representing a 17% growth from FY24. This guidance does not include contributions from the new acquisitions. The company has a proven track record of integrating acquisitions, having successfully integrated 10 businesses since December 2022.
The acquisitions are expected to reduce leverage on a net debt to EBITDA basis, positioning IMG strongly for a planned refinance in February 2025.
The acquisition of DVL and the equity raise are strategic moves to bolster IMG's growth and market presence. The acquisition is expected to enhance IMG's operational capabilities and financial performance, potentially leading to a positive impact on its stock price. The equity raise will provide the necessary capital to pursue further growth opportunities and strengthen the balance sheet.
Investor Reaction:
Analysts are likely to view the acquisition and equity raise positively, as they align with IMG's growth strategy and financial goals. The strategic expansion into Western Australia and the potential for increased EBITDA are expected to be well-received by investors.
Conclusion:
Investors should consider the potential long-term benefits of IMG's strategic acquisition and equity raise. The company's focus on expanding its market presence and improving financial performance could lead to significant value creation for shareholders.