Generation Development Group Ltd (ASX: GDG) shares aren't going anywhere again on Monday.
This morning, the high-flying ASX All Ords stock extended its trading halt by a further two days.
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Why is this ASX All Ords stock in a trading halt?
Before the market open, the investment bond product solutions provider requested a trading halt while it undertakes a capital raising.
According to the release, the company is aiming to raise approximately $287.9 million from investors.
This comprises a fully underwritten placement to institutional investors to raise approximately $114.4 million and a fully underwritten 1 for 7.16 accelerated non-renounceable entitlement offer to raise approximately $173.5 million.
These shares are being offered at $4.15 per new share, which represents a 10.8% discount to where the ASX All Ords stock last traded.
Why is it raising funds?
Generation Development Group revealed that it is raising funds after signing an agreement to acquire Evidentia Group for an up-front consideration of $320 million.
Management sees the acquisition of Evidentia as a highly strategic opportunity for the ASX All Ords stock. It is one of Australia's leading providers of investment management and tailored managed account solutions.
Furthermore, it highlights that the acquisition of Evidentia and subsequent merger with Lonsec Investment Solutions will bring together two of the leading and fastest growing managed account providers. This will make it "the undisputed leader in the market, with a combined total of over $25bn funds under management (FUM)."
'Another significant milestone'
Commenting on the deal, Generation Development Group's CEO, Grant Hackett OAM, said,
I am excited to announce today that Generation Development Group has entered into a binding agreement to acquire 100% of Evidentia. This transaction represents another significant milestone in GDG's growth strategy, following the successful acquisition of the remaining equity interests in Lonsec in 2024. Since launching in 2020, Evidentia has grown into a leading player in the rapidly expanding managed accounts market. The transaction presents a highly strategic growth opportunity for GDG, given the complementary nature of the Evidentia and Lonsec Investment Solutions businesses.
Evidentia's boutique tailored managed account solutions, client communications expertise and financial advice practice management experience, paired with Lonsec's enduring heritage of knowledge, broad managed account offering and strength in research will deliver a more complete and scalable offering. This will provide financial advisers and their clients with an even stronger value proposition, access to deeper insights, more extensive investment solutions and an integrated service experience that ultimately supports better outcomes for both financial advisers and clients. This transaction will be a continuation of the best-in-class services that both Lonsec and Evidentia have to offer.
Prior to its trading halt, this ASX All Ords share was up over 150% since this time last year.
