● Kogan.com is raising $100 million on the ASX in a fully underwritten placement at A$11.45 per share
● The price is a 7.5% discount to Tuesday’s closing price of A$12.38
● An addition $15 million is being raised via a share purchase plan
● The raise is “to act quickly on future value accretive opportunities”
● Kogan.com’s share price has boomed over the last three months after falling below $4 in mid-March
Online retailer Kogan.com is using its booming share price to raise $115 million for future acquisitions via a $100 million fully underwritten placement on the ASX, as well as a $15 million share purchase plan offered to existing eligible shareholders.
The company (ASX: KGN) is likely to look at picking off struggling bricks and mortar retailers hit hard by the coronavirus lockdown in recent months, having recently acquired the designer copy furniture brand Matt Blatt last month.
Kogan.com’s share price has more than doubled over the past three months, having hit a low of $3.79 in mid-March.
The placement at $11.45 per share is being offered at a 7.5% discount to Tuesday’s closing price of $12.38, and 7.9% discount to the two-day VWAP at Tuesday, June 9 of $12.43.
The placement will issue approximately 8,733,625 new shares, representing 9.2% of the company’s existing issued capital.
Eligible shareholders can apply for up to $30,000 worth of new shares, also at $11.45, under the share purchase plan.
Kogan.com’s sales have boomed during lockdown. In updated figures released last week, the company said its active customers rose to 2,074,000 at May 31, with gross sales up 103.6% in the fourth quarter-to-date for April and May (4QTDFY20) compared to the same period in 2019.
Gross profit grew by more than 130% across 4QTDFY20 and adjusted EBITDA was up 219.3% year-on-year in April and May. Financial year-to-date adjusted EBITDA to the end of May 2020 grew by more than 50% compared to 12 months ago.
Cash was $58.6 million at 31 May 2020, with the debt facility drawn to $26 million.
Chief executive and founder Ruslan Kogan said the company’s long-term strategy had allowed the business to thrive in the coronavirus period.
“We are now in a better position than ever to take advantage of growth opportunities,” he said.
“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.”
It its statement to the ASX, Kogan.com said multiple opportunities are presenting themselves and “is able to drive value from acquired businesses that have a strong brand by leveraging its existing systems, processes, supply chains and technology”.
The cash stockpile will be used “broaden the company’s offering, expand its customer base or enhance its operating model”.
The company said that between its IPO in July 2016 and June 2020 Kogan.com has delivered a total shareholder return of 654.5%.