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Stargroup raises $3.35m to complete Indue acquisition

ASX listed financial payments player Stargroup, has easily tapped its shareholders for $3.35m to fund the strategic acquisition of ATM machine service provider Indue.

Perth-based Stargroup said on Monday that the 119 million new shares, priced at $0.028 per share, would go to numerous existing shareholders as well as new high net worth and institutional investors.

In an update to the market, Stargroup said the funds raised would be used to finalise the much-anticipated acquisition of Indue, which management expects will result in a $4.1 million boost to group revenues and an EBITDA lift of $1.7m annually.

Stargroup chief executive Todd Zani said: “We are pleased to announce the completion of this capital raise and finalisation of the funding to complete the Indue acquisition. The strong support from existing shareholders, new high net worth and institutional investors is further evidence of our underlying business value.”

“The funds will go towards completing the Indue acquisition, an acquisition that will considerably increase forward revenues.”

Zani added that the $6.5 million purchase price was now fully funded and represented an acquisition multiple of just 3.83 times forward earnings.

The completion of the Indue acquisition was expected to occur by the end of the week, management said in the update.

Stargroup, which currently has hundreds of ATMs on the street across Australia is the only ASX listed company deploying ATM machines in the country.

It is the only locally listed ATM company with a direct equity interest in the manufacturer of its ATM technologies through NeolCP, a South Korean private company.

Finalisation of the Indue deal is a major milestone for Stargroup and means that the company, via its wholly owned subsidiary StarLink, will provide a range of ATM services to approximately 70 ATM deployers for around 1,700 ATMS, processing around 12,000,000 transactions per year.

Monday’s announcement comes after Stargroup recently posted its 13th consecutive quarter of record revenue in the March quarter, assisted by strong growth in its ATM division.

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Stargroup (STL)

Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 29/06/18

1 year TSR5 year TSR
4thAdvance NanoTek1986%102%
302ndGoldfields Money27%5%
496thWestStar Industrial-4%-54%
505thStargroup-6%-11%
767thCarnegie Clean Energy-61%-6%
722 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Share Transactions

09/08/17
$12k Bought
27/06/17
$0 Other
27/06/17
$35k Bought
Total value as at the date of the transaction
Source: Morningstar

Revenue

87th↑Stargroup$563k
96th↑Carnegie Clean Energy$5.3m
97th↓Advance NanoTek$5.1m
100th↑WestStar Industrial$4.6m
101st↓Goldfields Money$4.2m
239 listed industrial companies ranked by revenue.
Source: Morningstar

Remuneration from Stargroup

1366thJay Kim$29k
Ranked by total remuneration from all listed WA companies

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