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LONDON (Alliance News) - Venture Life Group PLC on Friday said it intends to launch a fundraising to cover acquisition costs, repay loans and support the growth of enlarged business.
The professional services firm said it plans to issue 46.9 million shares at a price of 40.00 pence each to raise GBP18.8 million before expenses. The company said it expects to receive net proceeds of GBP17.5 million.
Shares in Venture Life were trading 3.6% higher on Friday at 43.00p each.
The company said it will use funds to acquire the Dentyl Dual and BB Mints businesses for GBP4.2 million payable in cash.
Dentyl is an every-day mouthwash brand, which Venture Life believes is in a non-competitive position to its existing oral care product, UltraDEX. Meanwhile, BB Mints - manufactured in Japan - is in a newly launched breath freshness capsule.
The acquisition represents a significant opportunity for long term revenue and margin growth, Venture Life said.
"The Dentyl acquisition and the placing represents a significant step for Venture Life in our strategy to accelerate growth," said Chief Executive Jerry Randall.
In addition to that, the company said it intends to repay the convertible bonds and Biokosmes vendor loan notes for GBP3.7 million in aggregate.
In March 2016, Venture Life issued convertible bonds with a value of GBP1.9 million to a number of bondholders including directors of the company. Full repayment of the convertible bonds is due at the end of March 2019, the company said.
It also said that at the time of initial public offering, in March 2014, it issued loan notes with a value of EUR2 million to the vendors of skincare products manufacturer Biokosmes Srl. The agreements covering these vendor loan notes were amended such that the latest repayment date of the loan notes was extended from July 2017 to July 2020.
The remaining proceeds of the fundraising will be used for working capital purposes to support the enlarged business. Venture Life also expects to strengthen its balance sheet which will enable it to evaluate further potential strategic mergers and acquisitions.
"The additional funds raised through the placing also enable us to repay certain of our indebtedness and provide cash for working capital purposes to support the enlarged business," added Randall.
Venture Life said it will hold a general meeting on August 6.
