CHILDCARE centre operator G8 Education has been inundated with cash after an institutional offering closed oversubscribed.
The Gold Coast-based company, headed by Chris Scott, says it has raised $80.1 million through a placement of 26 million shares at $3.15 each.
This is $10 million more than the company indicated yesterday that it had secured and it primes the group for further acquisitions.
Some of the funds will be applied to the $42.6 million acquisition of 29 childcare centres in NSW, Victoria and Tasmania in a deal announced earlier this week.
The remainder will be applied to two separate deals totalling $28.6 million for 22 centres.
The latest deal marks G8’s first foray into Tasmania and will boost the number of childcare centres in its stable to almost 300.
G8 had $30.5 million in cash at the end of June and the company has seized on its rising share price to secure extra funds for future acquisitions.
“We are very pleased with the strong level of support shown for the placement,” says Scott, the managing director of G8 Education.
“We are delighted with the increased investment by our existing institutional shareholders.
“We acknowledge their ongoing support for the company and appreciate this external endorsement of G8’s performance and acquisition strategy.”
G8’s share price has been buoyed over the past year by rising dividends.
The company pays 3c a share each quarter, up from 2.5c a year ago, and has flagged its intention to increase dividends according to profits generated from new acquisitions.
G8’s shares were selling for about $3.35 in mid-morning trading.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support