G8 in capital raising

Childcare operator G8 hopes to raise $60 million in a share placement.

G8 Education (GEM) is wasting little time in making hay while the sun shines with the childcare centre operator going into a trading halt to announce a capital raising.

Management is looking to do a share placement to sophisticated and professional investors, and The Australian reports that G8 is hoping to get $60.1 million at $3.10 a new share, which is a modest 7.2% discount to its last traded price.

The equity raising comes hot on the heels of its senior unsecured note offering that raised $70 million for the company.

G8 has already committed the proceeds from the note offering for the purchase of 51 childcare centres for $71.2 million.

Going by the company’s acquisition history, these new centres should be earnings accretive on settlement and will add around $18 million to earnings before interest and tax on a 12-month basis.

The placement is almost certain to be earmarked for more acquisitions and the company lifted its debt facility by $29.25 million to $85.75 million from the Bank of Western Australia in May this year.

G8 last traded at a record high of $3.34 yesterday after its share price surged 162% over the year. G8 is part of the Uncapped 100.


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