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.