Why the Evolve Education (ASX:EVO) share price is spiralling lower this morning

The Evolve Education Group share price is spiralling lower in morning trade. We take a look at the ASX education share's latest announcement.

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The Evolve Education Group Ltd (ASX: EVO) share price is spiralling lower in morning trade, down 5%.

Evolve, which trades on both the ASX and New Zealand exchange, entered a trading halt at its request on Wednesday so it could undertake the placement of new shares.

This morning Evolve announced the successful completion of that capital raising. We look at the details of the ASX education share's placement below.

What did Evolve Education report on its capital raising

The Evolve share price is moving lower in morning trade after the company reported a successful $21.7 million institutional share placement.

The childcare and education centre operator will issue roughly 19.7 million shares ay AU$1.10 per share. That's 8.3% below the closing price of $1.20 per share prior to the trading halt but still 2.7% above the current price of $1.13 per share.

Commenting on the capital raising, Evolve's Managing Director Chris Scott said:

We are delighted with the support for the placement, confirming the investment community's belief in Evolve's value proposition and growth trajectory… The capital raising will contribute to further implementing our Australian expansion strategy, as we believe the current market conditions are highly favourable for centre acquisitions and market consolidation. We look forward to putting investors' money to work.

The company reported that Canaccord Genuity Limited and Petra Capital Pty Limited acted as Joint Lead Managers and Joint Bookrunners to the placement. Settlement on the ASX is expected on Monday, 12 April.

Evolve Education share price snapshot

Evolve has a market cap of $167 million. The company has recently been acquiring numerous new child care centres.

2021 hasn't been off to a great start for Evolve shareholders, with the share price down 12%.

But if you'd bought shares 12 months ago, you'd have watched the Evolve share price rocket 109%. That compares to a gain of 33% on the All Ordinaries Index (ASX: XAO).

Motley Fool contributor Bernd Struben 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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