23rd Dec 2019 14:36
(Alliance News) - OnTheMarket PLC on Monday said it has made a strategic investment for a 20% share in Glanty Ltd, the developer of 'teclet', an automated portal for the property lettings industry, as it also raised money in a share placing.
OnTheMarket also has received an option to acquire the remaining 80% of Glanty.
The AIM-listed property search portal said it intends to work with Glanty with to offer teclet and, potentially, other technology solutions to its customers.
The strategic investment is the next step in OnTheMarket's aim, it said, to provide an estate agent-backed alternative to rival property portals Rightmove PLC and Zoopla.
OnTheMarket said it will initially subscribe for new shares, representing a 20% stake in Glanty, for GBP797,000 in cash, spread over ten months from signing. OnTheMarket has the right to appoint a director to the board of Glanty.
Meanwhile, OnTheMarket said it has raised a total of GBP3.4 million via a placing of 4.9 million shares at a price of 70 pence each. The placing price represents a discount of 7.9% its closing price on Friday last week.
The stock was trading 1.8% lower in London on Monday afternoon in London at 74.60p a share, giving it a market capitalisation of GBP48.4 million.
The shares have been placed with a combination of existing and new investors, OnTheMarket said, with the proceeds expected to cover the acquisition costs.
OnTheMarket's Chair Christopher Bell has agreed to participate in the lacing and to subscribe for 14,285 shares. Following this subscription, Bell has an interest in 44,588 shares, representing 0.06% of the enlarged share capital.
OnTheMarket said it has been granted a call option under which it has the right to buy the remaining shares in Glanty for an initial consideration of GBP1.5 million plus repayment of GBP1.4 million in loans, and an earnout linked to a revenue and earnings before interest, taxes, depreciation, and amortization. The earnout could result in deferred payments of up to GBP12 million after three years following the exercise of the call option.
The option is exercisable for a period of 15 months from now to March 23, 2021.
OnTheMarket also has a put option to sell its Glanty stake back to a Glanty shareholder for the same GBP797,000 it paid. Meanwhile, that same shareholder has a call option to buy the OnTheMarket stake back for the same price if OnTheMarket decide to not exercise its call option for the remaining 80%.
Looking ahead, OnTheMarket reiterated its guidance, saying that it expects to achieve a broadly breakeven adjusted Ebitda position for the financial year to the end of January 2021, with monthly breakeven achieved in second or third quarter.
By Evelina Grecenko; [email protected]
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