CORPORATE Travel Management (ASX:CTD) will expand its UK presence with the purchase of Redfern Travel funded by a $71 million capital raise announced today.
Additionally, the Brisbane-based business is consolidating its Australian operations by the simultaneous purchase of Tasmania's Andrew Jones Travel.
With a value of $69 million, Redfern will take up the bulk of the funds, while Andrew Jones Travel will cost $5 million.
Under the offer, underwritten by Morgans, eligible shareholders as of 19 December can subscribe for one new share for every 21 they own at $15 each.
Corporate Travel Management is trading up 5.35 per cent, at $16.94 per share this morning.
The company has updated its EBITDA guidance to $92-$97 million, from $85-$90 million, for the year ending 30 June 2017.
The companies are expected to contribute $7 million to earnings for the five months of the FY17 financial year that follow the completion of the acquisitions on 1 February 2017.
Redfern is based in Bradford, and it brings a proprietary bookings system and an experienced management team, which will take up shares in Corporate Travel Management.
Company founder, Jamie Pherous (pictured), who owns 21.6 per cent of the shares in Corporate Travel Management, will participate in the offer to the extent possible, while the independent directors of the company will also participate.
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