Proxama to place shares at a small premium

Mobile marketing and payment group Proxama announced plans to raise up to £4m as it revealed it is in talks to make a £3.8m acquisition.

If it goes ahead, the deal to buy Aconite technology, a provider of Mastercard, Europay and Visa transaction processing, would take place in two phases. An initial £2.06m would be paid in shares, with the remaining sum subject to an earn-out agreement.

The share placing is also due to be carried out in two tranches, so that investors can make use of the tax advantages available under EIS and venture capital trust (VCT) legislation. Stock issued as a part of the first tranche, with a value of £3.27m, is expected to start trading on 1 December. The second tranche of £416,874 will being trading on 10 December.

New funds would provide Proxama with working capital and allow it to meet debt repayment and product integration should the deal with Aconite go ahead.

Shares to be placed at a small premium

Investors were offered stock at 2.5p a share. That constitutes a 4.2% premium to the closing mid-market price on 3 November.

A further placement, which would see £310,000 raised, has been conditionally subscribed by Elderstreet, a venture capital firm and existing shareholder of Aconite, subject to the acquisition finally going through.

CEO says potential for accelerated development

Neil Garner, chief executive officer (CEO) said “We believe putting our two organisations together would create a potential opportunity to accelerate our development across Europe and the USA as well the chance to cross sell to the combined customer base. The possible acquisition of Aconite […] would integrate well into our CardGateway platform to provide a complete end-to-end solution for card issuers to migrate from cards to mobile devices.”

Garner added further: “These additional funds will enable us to address the considerable opportunities that are emerging within the fast growing mobile commerce, NFC smartphone and contactless payments market.”

As of 13:40 shares in the firm were rising by 13.73% to 2.62p.