Irish fintech and insurance software player Fineos has ruled off a $40 million equity raising in a bid to beef up its cash buffers.
The company’s long-time brokers, Macquarie Capital and MA Moelis, spent Tuesday crossing potential investors for the raise while trading was halted. They pressed play after market close, mailing out term sheets for an underwritten placement. The deal was locked and loaded by 5:30 pm.
The raise was structured as a fully underwritten $35 million institutional placement. Fineos founder and chief executive Michael Kelly committed to subscribe for an additional $5 million worth of CHESS depositary interests. It represented 5.6 per cent of the company’s current size.
The offer was priced at $2.25 per CDI, which is a nearly 11.8 per cent discount to the last traded price of $2.55 and a 15 per cent discount to the five-day volume weighted average price.
Potential investors were told Fineos would use the proceeds to fortify its balance sheet ahead of hitting positive free cash flow in the third quarter of financial year 2024.
Fineos, which was founded in 1993, provides cloud-based insurance claims and policy administration software, as well as absence management software. It reported a cash balance of €25.5 million at June 30 and had no debt. The company is due to post its full-year results on August 23. It expects to report €125 million revenue which would be down 1.7 per cent, citing major customer reducing services work in favour of R&D investment in product.
It expects EBITDA to drop by 70.2 per cent to €2 million.
Revenue this financial year is expected to be between €131 million and €135 million. In May, the company announced a €10 million operating cost out program, which it said its on track to achieve.
The $820 million company was re-added to the S&P/ASX All Technology Index in June and has seen its stock price rise almost 60 per cent this year.
Source: Financial Review