Ecoya raises $4.7M selling stock at discount

Ecoya completes $4.7 million share placement to fund Trilogy acquisition

By Jason Krupp

Sept. 14 (BusinessDesk) – Ecoya Ltd., the scented candle company, has completed its placement of 6.3 million shares, worth $4.75 million, to partially fund its acquisition of cosmetics company Trilogy Natural products Ltd.

The company’s stock was placed into a trading halt yesterday for a bookbuild ahead of its capital raising.

The shares were sold at 75 cents each, or a 6.3% discount to its current 80 cent trading price, to major shareholder the Business Bakery L.P., interests associated with directors Rob Fyfe and Rich Frank, and a number of institutions and high net worth investors.

“We are pleased with the initial response towards the acquisition of Trilogy which we believe offers a compelling strategic fit with Ecoya’s existing business and will deliver even greater upside for investors,” said executive chairman Geoff Ross.

Ecoya paid $10 million in cash for Trilogy, with a further earn out payment of up to $10m to follow, half in cash and half in $1 shares of Ecoya dependent on the cosmetics company reaching earnings targets next year.

The deal, which accounts for 58% of Ecoya’s $35 million market capitalisation, was announced to the market on Friday. Ecoya listed on the NZX in May this year, and raised $10.1 million to fund its global expansion in the home fragrance and body and bath products markets.

Ecoya also announced that it will offer shareholders the opportunity to extend their holdings in the company at 75 cents a share under their share purchase plan, and aims to raise $1 million from the scheme.

Trilogy is “profitable” and is expected to boost overall revenue and reduce Ecoya’s projected losses this year, the company said in an earlier statement. Trilogy’s 2009 revenue was $9.3 million.

Ecoya shares were last trading at 80 cents, and have declined 16% since their debut at 95 cents in May.

(BusinessDesk)

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