Global Health raises A$7.8m via Placement to Accelerate Growth in the Digital Healthcare Sector
Highlights:
- Completes A$7.8 million placement to sophisticated investors and leading institutional investors at $0.555 per share
- Proceeds from the Placement to support an expanded sales force and an increased R & D team to accelerate the progression of customers to SaaS
- Forecasting EBIT breakeven and revenue of approximately A$6.8m for FY21
- Targeting 25% p.a. growth in recurring revenue utilising new growth capital
- Net cash of $8.3m post-completion allows further facilitation of growth via strategic partnerships and potential Merger & Acquisition opportunities
- A significant number of new institutional investors to join the share register as part of the placement
Global Health Limited (ASX: GLH) (‘Global Health’ or ‘the Company’) is pleased to announce the successful completion of a A$7.8 million two-tranche placement offer of new, fully paid ordinary shares (‘New Shares’) to sophisticated and institutional investors (‘Placement’) at an issue price of $0.555 per New Share (‘Offer Price’). Each participant in the Placement will be offered 1 free attaching option for every 2 New Shares issued (‘Options’). The Options will be unlisted, with a two-year term and an exercise price of $0.8325. The Placement was strongly supported by existing and new investors.
The Company will offer the Options under a prospectus to be issued shortly. In addition, a General Meeting will be called to seek approval for the second tranche of New Shares to be issued under the Placement, together with the Options attaching to the second tranche of New Shares.
Global Health’s Executive Director, Mathew Cherian, commented:
“This placement to retail and leading Australian institutional investors comes at a very opportune time for Global Health as the Company enters into a transformational growth phase, driven by a highly prospective business and sales pipeline. It will allow us to increase momentum with an expanded sales force. It also affords the Company the opportunity to consider strategic and potential M & A deals, as the market for digital healthcare continues to grow at a rapid pace.”
Use of Funds
Of the A$7.8 million in funds raised, approximately A$4.0 million will be used to support the Group’s expansion plans on the sales front and expanding the R & D team. A further A$2.0m will provide the Company with a stronger balance sheet, improving the chance of procuring larger Government contracts and providing capacity to execute strategic initiatives as well as, potentially Merger & Acquisition opportunities.
Global Health’s significantly strengthened capital position will support the implementation of key market development initiatives:
- Increased sales focus in the Victorian market and expansion into the broader Australian market for MasterCare and other key products
- Accelerate the upgrade of customers from on-premises to SaaS subscriptions
- Increase service delivery capacity to cater for increased deal flow
- Strengthen the balance sheet
- Provide capacity for potential M & A opportunities
- Ensure exceptional performance and customer experience for SaaS customers
Further details on the use of funds are set out in the investor presentation released to ASX on 15 June 2021.
Placement Details
The Placement is being conducted in two tranches:
- Tranche 1: 7,039,640 New Shares will be issued to raise $3.9 million (before costs), utilising the Company’s available placement capacity pursuant to ASX Listing Rules 7.1 and 7.1A. Settlement of Tranche 1 is expected to occur on 21 June 2021, with allotment to occur on 22 June 2021.
- Tranche 2: 7,039,640 New Shares will be issued to raise $3.9 million (before costs), subject to shareholder approval. The Company will seek shareholder approval under ASX Listing Rule 7.1 for the issue of the Tranche 2 Shares at an Extraordinary General Meeting to be held before the end of July. If shareholders approve the Tranche 2 securities, settlement of Tranche 2 will occur shortly after the Extraordinary General Meeting.
The New Shares issued under the Placement will rank equally with Global Health’s existing fully paid ordinary shares, and the Company will apply for quotation of the New Shares on ASX.
The Offer Price of $0.555 represents a 29.7% discount to the last closing price of Global Health’s shares on Wednesday, 9 June 2021.
Options
New Shares issued under the Placement will be offered with free attaching Options, with a term of 2 years from issuance and an exercise price of $0.8325. The Options will be offered at a ratio of one Option for every two New Shares issued and will be offered under a separate, transaction-specific prospectus to be issued by the Company. The offer of Options to participants in Tranche 1 of the Placement will be unconditional (on the basis that the Company has the available capacity under ASX Listing Rule 7.1 to issue the Options) and the offer of Options to participants in Tranche 2 of the Placement will be conditional on the approval of the issue of the New Shares under Tranche 2 and the Options attaching to those New Shares.
Bell Potter Securities Limited and Baker Young Limited, who acted as Joint Lead Managers to the Placement, will each be offered up to 1,126,363 Options (on the same terms as the attaching Options) as part-payment for services provided in connection with the Placement.
2021 Extraordinary General Meeting
In order for the Company to seek the necessary shareholder approvals for the Placement, the Board intends to convene an Extraordinary General Meeting to be held before the end of July 2021.
The Company will dispatch a notice of meeting to shareholders shortly.
View the ASX announcements here:
Announcement of placement: View here>>
Investor presentation: View here>>
Appendix 3B-Proposed issue of securities: View here>>