S&P/ASX 300 Index (ASX: XKO) stock IPH Ltd (ASX: IPH) is up more than 2% after the business announced it had completed the institutional part of its capital raising.
The intellectual property services group owns a number of businesses that operate across Australia, Canada, China, Hong Kong, Indonesia, Malaysia, New Zealand, the Philippines, Singapore and Thailand.
It's acquiring the Bereskin & Parr business to boost its position in the Canadian market.
$100 million placement complete
IPH announced to the ASX that it has successfully completed its $100 million fully underwritten institutional placement.
The ASX 300 stock revealed the placement was "strongly supported" by both existing shareholders and new institutional investors, with demand higher than the level of funds sought to be raised.
Under the placement, 17.7 million new IPH shares were allocated to institutional investors at a share price of $5.65. This was a 7.1% discount to the closing price of $6.08 on 21 August 2024.
The business is being acquired for approximately A$90.2 million, being approximately A$63.2 million cash and issuing 4.5 million new IPH shares valued at A$27 million. It will operate under the Smart & Biggar brand. This is IPH's fourth acquisition in Canada.
IPH has a goal of being the leading IP services group in secondary IP markets.
This is expected to be accretive for underlying earnings per share (EPS) in the low single digits, on a pro-forma FY24 basis (including full run-rate synergies).
After this transaction, the ASX 300 stock's pro forma leverage as at June 2024 will be approximately 1.7x earnings before interest, tax, depreciation and amortisation (EBITDA).
Management comments
The IPH managing director and CEO Andrew Blattman said:
We thank our existing shareholders for their ongoing support and are delighted by the strong demand from new and existing institutional investors for the placement and the acquisition of Bereskin & Parr.
There has been clear acknowledgement of the strategic benefits that Bereskin & Parr will bring to our existing position in the Canadian IP market and its alignment with our ambition to be the leading IP services group in secondary IP markets.
Share purchase plan
Eligible shareholders with a registered address in Australia or New Zealand at the record date of 7 pm Sydney time on 21 August 2024 will have the opportunity to apply for up to $30,000 worth of IPH shares, free of brokerage.
Shares under the share purchase plan (SPP) will be offered at $5.46 per share, which is the offer price less the final FY24 dividend of 19 cents per share from the ASX 300 stock.
The SPP is intended to raise up to $25 million, with the ability to accept oversubscriptions. The company said it reserves the right to scale back applications under the SPP.
IPH share price snapshot
Since the start of 2024, the IPH share price is down 3%, as shown on the chart below.
