Wealth manager AFH Financial has announced it is looking to raise up to £10m through the placing of new ordinary shares in the group - at 175p per share - on the AIM market of the London Stock Exchange.
According to AFH, net proceeds of the placing will be used to "execute the company's acquisition pipeline and for general corporate purposes". This financial year, AFH has announced five acquisitions, paying a combined £2m in initial cash consideration.
Provided excess demand for the placing exists, AFH chief executive officer Alan Hudson (pictured) has agreed to sell up to 1,000,000 existing ordinary shares owned by him at the placing price, which would raise gross proceeds of up to £1.75m.
In a statement, the company said: "The board believes the opportunity exists to acquire appropriately priced businesses and that the net proceeds of the placing will provide the company with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes."
According to AFH, the "near-term pipeline is particularly attractive", with four potential deals currently at various stages of the due diligence and engagement process. In addition to these four potential deals, it said, the company continued to assess other potential acquisitions "to further accelerate its growth".
AFH added that its core business continued to perform "in line with expectations, with strong recurring revenue and further additions to funds under management". At 1 March 2017, AFH had cash balances of £4.1m and remained "fully funded to satisfy the deferred consideration liabilities of announced acquisitions to date as they fall due".
The placing will be conducted by way of an ‘accelerated bookbuild process' that will be launched immediately and made available to eligible new and existing institutional investors. The placing is conditional on shareholders approval.
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