LONDON (Alliance News) - Haydale Graphene Industries PLC on Friday outlined proposals to conduct a discounted fundraising to help fund a USD7.0 million acquisition of a US-based silicon carbide whisker manufacturer in a cash and share deal.
The graphene and nanomaterial business also released its results for the year to the end of June, revealing a wider loss for the period as a large rise in costs offset the lift in revenue in the period.
Haydale plans to purchase ACMC Holding Inc, based in South Carolina, and to support the buy, it launched a placing and subscription of shares priced at 160.0 pence each. The placing was conducted through an accelerated bookbuild carried out by Cantor Fitzgerald.
The issue price was a 6.8% discount to the average closing price over the last 20 trading days, it said. The price was a 13% discount to the closing share price on Thursday.
Haydale was originally aiming to raise GBP2.1 million but confirmed later in the day that it fell just short and raised GBP2.0 million by issuing 1.3 million new shares. However, a further GBP55,600 was also generated after some directors subscribed to 34,750 shares at the same price.
Chairman John Knowles subscribed to 6,250 shares to push his holding up to 155,464 shares, but his stake has dropped post-fundraising to 0.91% from 0.97%. Deputy Chairman Antony Belisario did not buy any shares meaning his existing holding of 379,050 shares remains unchanged, but the stake has fallen to 2.23% from 2.46%.
Chief Executive Ray Gibbs purchased 6,000 shares and now holds 482,000 shares in total, and his stake has dropped to 2.83% from 3.09%. Finance Director Matt Wood bought 6,250 shares and now holds 9,821 shares. His stake has now risen to 0.06% from 0.02%.
Non-Executive Roger Humm purchased 6,250 shares to push his holding up to 34,709 shares and that caused his stake to rise to 0.2% post-fundraising from 0.18%.
Non-Executive Roger Smith did not buy any shares, resulting in his holding of 288,455 shares to drop to a stake equivalent of 1.69% from 1.87%. Fellow Non-Executive Graham Eves is the only member of the board with no shareholding in Haydale whatsoever.
The company will also raise a further GBP500,000 via an open offer of up to 312,500 shares at the same price.
"Haydale, having evaluated the North American market, has concluded that the best way to secure a strategic territorial foothold is to acquire a complementary business offering significant growth potential and synergistic products, whilst also allowing for substantial cross selling opportunities," said the company.
"The proposed acquisition would provide the group with an established base and market position in silicon carbide fibre and whisker in North America which will be the first US "Centre of Excellence", situated in the high growth technology region of South Carolina," it added.
Silicon carbide fibre and whisker fills a key market need for a cost-effective, high temperature ceramic fibre. It is designed for high temperature ceramic and metal matrix composites, and improves structural and thermal properties: strength, toughness, abrasion resistance, hardness, thermal conductivity, thermal shock resistance, and overall durability.
Haydale will pay an initial USD5.0 million in cash and shares for the deal plus a possible further USD2.0 million based on certain conditions being met in the future, including the performance of Haydale's share price.
The initial consideration is broken down into the repayment of asset-backed loans worth USD2.9 million, repayment of an existing working capital facility of USD500,000, a cash payment to the vendors of USD600,000 and a USD1.0 million equity consideration paid in Haydale shares.
The fundraising being conducted in tandem by Haydale will be used to pay the cash consideration to the vendors, provide working capital and make loan repayments.
Haydale said it has also appointed Trevor Rudderham as chief executive of Haydale Technologies Inc, the US subsidiary that is acquiring the business, to run and grow the group's North American operations.
Haydale also revealed its pretax loss for the year to the end of June widened to GBP3.6 million from GBP2.9 million despite reporting a rise in revenue to GBP1.2 million from only GBP644,000 last year.
The rise in revenue was offset by administrative costs increasing to USD5.9 million from GBP4.5 million.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Haydale (HAYD)