AMA Group has announced a major share transaction which is says will support the foundations for the next phase of the company's growth.
In an ASX announcement the group reported 'a placement of 10 million shares at 95.32c per share (the 20 trading the proceeds of which will be used to meet the working capital needs of our growing operations especially the new procurement business. This facility has been sourced in circumstances where the Company believes there is potential growth in the procurement business which will benefit from additional working capital, and the current headroom in banking facilities is designated for use in acquisitions.'
It also reported that AustralianSuper, Myer Family Investments and Colinton Capital Partners are the acquire the entire share placement as well as a total of 62million shares from Ray Malone, Andrew Hopkins and a number of member of the AMA Group panel repair business management team. The share sales have been agreed at the same price as the share placement.
When the deal is completed AustralianSuper will become the largest shareholder acquiring 9.67% of the issued capital of the AMA Group. Colinton Capital Partners will acquire up to 2.23% and Myer Family Investments up to 1.49%.
Malone, Hopkins and the participating members of the AMA Group management team have entered in escrow arrangements in relation to their retained shares. They are required to retain these shares for a year after which 50% become available for sale and the remaining shares will be available for sale after two years.
Ray Malone has announced his intention to transition from executive chairman to a non executive director role over the next nine months. Simon Moore, senior partner of Colinton Capital Partners has been invited to join the AMA board of directions and will act as deputy chairman.
Malone said: "“The transactions neatly solve the challenge posed by the significant shareholding of mine, Andrew Hopkins and the panel repair business management team while also providing the Company with the working capital needed to expand its new procurement business. The board and management team are extremely excited to welcome the new investors on to the Company’s share register. We are proud to have our plans and vision for the business receive the endorsement of investors of
the calibre of AustralianSuper, Myer Family Investments and Colinton Capital Partners. At the same time, the Board understands that to successfully realise our goal of becoming an ASX200 index component, the company must attract the very best management and board talent and that adoption of best practice corporate governance will help us to do so. The
addition of Simon Moore to the Board of Directors will add both corporate finance skills and the strategic execution discipline to the board, complementing the insurance industry knowledge and management experience of our other recent addition, Anthony Day.”
In relation to the announcement of his intention to transition non executive director over the next nine months, Ray Malone said: “In recent times, I have increasingly ceded day to day control of the operations to Andrew and we have focused my
efforts on the areas of the business where I can add the greatest value. In particular, I have been helping build the procurement business which has the potential to create significant value for shareholders. I will be doing my utmost to help Andrew succeed in his new role of group chief executive officer”.
Hopkins, said: “AMA Group’s announcements over the past two weeks mark the start of an exciting new period of growth for the company’s operations. Ray, the panel repair business management team and I have shown our strong belief in the future prospects of the business by voluntarily entering into the escrow arrangements and we are buoyed by the decision of AustralianSuper, Myer Family Investments and Colinton Capital Partners to support our strategy and the recent management
and board changes with their substantial investment. Ray and I have been partners in growing the AMA Group panel repair business over the last three years and I am looking forward to continuing to work closely with him in the future.”
The share placement and the secondary sales are expected to settle on 26 November.