The RPM Automotive Group Ltd (ASX: RPM) share price is on the move today. This comes after the automotive aftermarket group announced it had secured funding to fuel its growth strategy.
At the time of writing, RPM shares are up 11.48% to 34 cents
RPM receives investor backing
According to its release, RPM advised it has executed an agreement with strategic investor and fund manager, Collins St Value Fund (CSVF).
An equity placement of $2.5 million will see CSVF invest in RPM for 30 cents per share. This reflects a 5% discount to the last closing price of 30.5 cents on 18 August 2021.
In addition, CSVF agreed to provide a 3-year $5.5 million unsecured convertible note at 35 cents per share. This is subject to shareholder approval which will be sought at a general meeting in the near future.
The convertible note will pay a coupon rate of 3.5% per annum in quarterly instalments. The payment can be in the form of either cash or RPM shares.
In total, the $8 million funding will be used to support RPM's growth plans without the need to raise additional capital.
RPM co-founder and managing director, Clive Finkelstein commented:
Over the next 12 months RPM intends to continue its strategy of growth via strategic acquisitions. This funding package has been set on attractive terms to our shareholders and provides RPM with the capital necessary to take advantage of attractive M&A opportunities while introducing a well-respected institutional investor onto our register.
CSVF founder and chief investment officer, Vasilios Piperoglou added:
As a concentrated fund we don't back many teams. RPM have proven that they possess the right entrepreneurial management team and maintain a sustainable and scalable business model. Especially in today's markets, we are thrilled to have identified and invested in RPM, a company that offers a great growth strategy, and appears to offer clear value.
RPM share price snapshot
Setting aside yesterday's 7.02% gain and today's 11.48% rise, RPM shares were on a decline since April 2021. Nonetheless, the company's share price has jumped 40% over the last 12 months, and 65% year-to-date.
RPM commands a market capitalisation of roughly $41.9 million, with 123.2 million shares on its registry.
