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.

----------

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles