Bravura updates on GBST acquisition proposal; concludes A$165mn shares placement

Bravura Solutions Limited (ASX: BVS) is an information technology company which employs over 1,300 people in 12 offices across several countries including United Kingdom, Australia, Africa etc. It is the global supplier of software and professional services for investment, funds administration, pension etc. The company has over 350 business clients, and above A$2.8 trillion in assets are entrusted to the company’s systems.

On 3rd May 2019, BVS notified the market about the successful conclusion of the company’s shares placement.  The placement obtained solid backing of both existing institutional shareholders and non-holders at the upper end of the bookbuild array.

Details of the institutional placement

The company raised a total of approximately A$165 million from institutional placement, through the issue of approximately 28.7 million shares at an issue price of A$5.75 per new share. This issue price represents a 7.9% discount to the closing price of A$6.24 on Wednesday, 1st May 2019.

The initial announcement for the fundraising through share placement was announced on 2nd May 2019.

Funds utilisation

The proceeds from the funds are intended to be used towards activities for the fund growth including:

  • Continuation of development of its wealth management system, Sonata.
  • Acquisitions and product functionality enhancements to support expansion in existing geographies and into new markets and geographical areas.
  • On the procurement of GBST Holding Limited.

 Key personnel’s statement

Mr Tony Klim, the company’s Chief Executive Officer, said that the company is pleased with the successful placement and support showed by the investors. Also, the Board and management of BVS are excited with the growth opportunities and the capital raised, which would be providing balance sheet flexibility for further growth activities.

Update with respect to Bravura Indicative Proposal

Previously, on 12 April 2019, it was announced by BVS on ASX that it had made a non-binding indicative proposal to procure all the shares of GBST on an offer price of $2.50 per GBST share.

The Board members of GBST, along with its financial and legal advisers, is conducting a careful assessment of the Indicative Proposal which remains ongoing. The Board is also considering the views from shareholders post receipt of the Indicative Proposal. Many shareholders conveyed their concerns on the aspects if the Indicative Proposal which was at go to value and certainty, consisting of BVS’s request to hold due diligence to its gratification, especially since it is competing with GBST. These above-mentioned matters also concern the board members of GBST. Therefore, it is in discussion with BVS and its advisers to further comprehend GBST’s position.

 Trading Halt

On 2 May 2019, BVS had announced that its shares would be on a trading halt on ASX, in accordance with the listing rule 17.1.  The trading halt was requested by the company pending an announcement to be made by it related to capital raising.

Since the company had released the announcement, the trading halt was lifted, and the commencement of trading had begun from 3rd May 2019.

Latest financial performance

In the recent 1HFY19 results for the period ending on 31 December 2018, the company posted revenue of A$127.4 million and the net profit after tax at A$16.3 million. It also introduced a dividend of $0.053 on fully paid ordinary shares. 1HFY19 return on equity was posted at 28% and return on assets was at 22%.

Technical Outlook

The stock of the company is currently trading at A$6.010 (as on 6 May 2019, 1:05 PM AEST), up by 1.178%.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.

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