13th May 2015 07:24
LONDON (Alliance News) - Constellation Healthcare Tech Inc Wednesday said it is proposing to raise GBP12.9 million, or about USD20.3 million, by placing up to 7.8 million new shares at 140 pence each, money it will use to buy a pipeline of six acquisition targets as it looks to consolidate the rehabilitation case management market in the US.
The fundraising also includes a subscription for 1.4 million new shares by Chief Executive Paul Parmer on "substantially the same terms".
The placing shares represent about 12.1 % of the London-listed US Healthcare company's enlarged share capital and the subscription shares about 2.2% of the enlarged capital. The placing price is a 15.3% discount to Tuesday's closing mid-market price.
Constellation said its ultimate goal is to have a presence in all states across the US, up from the 25 states it currently operates in, and in as many medical specialties as possible.
It said it has letters of intent regarding potential acquisitions with six healthcare services companies that all have revenue in excess of USD10 million and earnings before interest, tax, depreciation and amortisation of at least USD1.5 million. It isn't facing any competition to buy any of them, and thinks there are 600 redeployable jobs, each of which could boost its Ebitda by about USD35,000 in the first full year after redeployment.
"The directors believe that these acquisitions are the best route to building rapidly on the company's reputation at the forefront of the consolidation of the RCM industry in the US," it said.
Constellation added that it is also looking to optimise its capital structure and is in active discussions with a number of senior debt providers in an effort to secure debt facilities at a lower cost and on more flexible terms that its current facility.
Its shares were down 12.0% at 165.00 pence in London early Wednesday.
By Steve McGrath; [email protected]; @stevemcgrath1
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