Online retailer Kogan wants $115 million in new capital to continue to pick up growth options – inside and outside its rapidly growing business.
The ASX-listed web-based retailer announced on Wednesday it would undertake its first-ever share raising, seeking $100 million from institutional investors in a fully underwritten share placement, priced at $11.45 per share.
This is a 7.5% discount to Kogan’s $12.38 closing price on Tuesday and a 12% discount to the company’s all-time high of $13 reached last week.
The shares are up 140% share since hitting a low of $3.79 on March 16 thanks to continuing strong sales to a growing list of online customers.
Kogan will follow the institutional issue with a smaller raising from its retail base which will look for $15 million.
Both issues are intended to increase Kogan’s cash on hand and give it the option to “act quickly” on any future acquisitions, along with helping the company maintain its strong growth.
Kogan bought replica furniture retailer Matt Blatt in May for $4.4 million and the digital assets of historic electronics retailer Dick Smith, which it snapped up for $2.6 million in 2016.
Kogan told the market there were “multiple opportunities” presenting themselves, but the business would focus on acquisitions which expanded Kogan’s customer base or broadened its offering.
The company “is committed to making the most in-demand products and services more affordable and accessible,” chief executive and founder Ruslan Kogan said.
“Our long-term strategy has enabled us to thrive in the current challenging environment, and we are now in a better position than ever to take advantage of growth opportunities.
Our low cost of doing business and digital expertise have put us in the driver’s seat to capture market share as the retail industry undergoes significant change.”
Kogan said it will have $158 million in cash after the issues.
Trading in the shares was suspended yesterday to allow the major issue to take place.
