UPDATED: Ecoya completes $4.7M placement

UPDATED: 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., interest associated with directors Rob Fyfe and Rich Frank, and a number of institutions and high net worth investors.

The Business Bakery - which is co-owned by Ecoya’s executive chairman Geoff Ross, executive director Grant Baker and CFO Stephen Sinclair - participated in the capital raising, keeping its shareholding little changed at about 35%.

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. The proceeds of which would go towards reducing bank debt.

“Whilst dilution is one part, the other part is the (potential for) increased value you get from the greater business scale,” Ross told BusinessDesk. “Trilogy offers the potential of significant top line and bottom benefit to our business.”

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.

Ross said the first tranche was funded through the capital raising and the remaining $5.25 million through bank debt.

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.

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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