The Home Consortium Ltd (ASX: HMC) share price isn’t going anywhere on Friday after it requested a trading halt.
Why is the Home Consortium share price in a trading halt?
The property company requested a trading halt this morning so it could undertake an equity raising to fund a number of new acquisitions.
According to the release, Home Consortium is aiming to raise a total of $125 million via a fully underwritten placement at an issue price of $3.80 per new share.
This represents a discount of just 2.6% to its last close price of $3.90.
What is Home Consortium acquiring?
The company has agreed terms to acquire a portfolio of 6 health, education, and Government services properties for a total initial investment of $62 million. This will increase to $131 million including fund-through contributions.
Management notes that the acquisitions are consistent with its strategy to increase its exposure to health, wellness, and Government assets.
In addition to this, Home Consortium has entered into an agreement to acquire Gregory Hills Home Centre in New South Wales. The company has agreed to acquire the centre for a total consideration of $32 million. Management notes that this increases its exposure to the Western Sydney growth corridor.
These acquisitions increase Home Consortium’s Health, Wellness, and Government exposure to over $400 million of assets. Management also believes they provide the scale to establish a second standalone fund which will be managed by the company in the first half of 2021.
Home Consortium’s Executive Chairman & CEO, David Di Pilla, commented: “The acquisitions announced today are an exciting step for HomeCo and increases our exposure to the opportunity rich Health, Wellness & Government sectors. Importantly, the establishment of the HealthCo REIT in early 2021, today’s $125 million placement and HomeCo’s newly formed Capital Partnerships Group will set the foundation for HomeCo to accelerate growth in assets under management.”
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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