Fintech firm Novatti Group Limited (ASX:NOV) is launching an expanded growth strategy with a $45 million capital raising.
Managing Director, Peter Cook, said that with this expanded growth strategy, Novatti will:
- Increase its presence in existing markets;
- Enter new markets;
- Pursue a range of acquisition opportunities; and
- Acquire a strategic stake in Reckon Limited.
The Capital Raising was strongly supported by a number of highly regarded Australian and offshore institutional investors.
Petra Capital Pty Ltd is acting as sole lead manager and sole bookrunner for the Capital Raising.
Novatti enters a new, expanded growth phase as we seek to increase our presence in existing markets, enter new markets, and pursue a range of acquisition opportunities,” Mr Cook said.
“Importantly, this capital raising specifically enables Novatti to acquire a strategic stake in a leading accounting software provider, Reckon Limited. With revenue of more than $75 million, EBITDA of more than $32 million, and a rapidly growing pool of more than 100,000, cloud-based customers, we believe this stake in Reckon presents an attractive investment for Novatti.
“As a payments company and, in particular, leveraging our experience with Emersion, we know that there is a tight synergy between business automation software and payments processing. For software clients, this combination drives increasing productivity. And for providers, it drives a strong economic return based on cross selling. We believe Novatti’s strategic investment in Reckon will open up new opportunities to explore synergies and deliver growth in the Novatti business.
“We are delighted with the strong support for our capital raising, and welcome a number of highly regarded Australian and offshore institutional investors as new Novatti shareholders. We also welcome further participation by existing shareholders in the announced share purchase plan.
“Novatti has a strong track record of delivering growth for its shareholders from funds raised. In addition to funding our strategic stake in Reckon, these funds enable us to build and expand on Novatti’s business. For example, since Novatti undertook its last substantial capital raising in the June FY20 quarter, quarterly sales revenue has increased by 33%.
“At the same time, Novatti’s market capitalisation has also increased by more than 200%.
“This capital raising and strategic acquisition marks another important milestone in Novatti’s journey as we pursue greater growth for our shareholders.”
Mr Cook said Novatti has a proven track record of applying funds raised to grow its business. In particular, across the past 12 months Novatti has:
- Formed new partnerships with global payments leaders including Apple Pay, Google Pay, Samsung Pay, and UnionPay
- Obtained regulatory approval and then partnered with Afterpay to issue Visa prepaid cards in New Zealand
- Expanded business development resources
- Launched its new acquiring business, enabling merchants to accept payments online and through mobile
- Integrated with Ripple with transactions taking place in the Philippines
- Successfully launched Emersion in the US
- Secured funding commitments and a strategic partner to launch and operate its new banking business, once regulatory approval is obtained
