EVO - Evolve Education

[sb9]

Wilson Asset Management adding a decent amount to their holding seems like a good sign. I first started looking deeper into EVO after looking at one of their monthly's a month or so again. Some interesting holdings in their top 20 in the microcap fund which has performed very well.

WAM are more than happy to accumulate holdings off weak hands. They're good fund managers.

[golden city]

Another big acqusition on the way with capital raising

[Balance]

Another big acqusition on the way with capital raising

Exactly what the doctor ordered!

[Scrunch]

Another big acqusition on the way with capital raising

With a good cash position it needs to be funding the acquistion of a significant ECE. Probably from Australia but there were multiple ABC references as Craig Presland was announced as the new COO.

[Balance]

More color to the announcement :

https://cdn-api.markitdigital.com/ap...df02a206a39ff4

[sampson]

Interesting. Was thinking of topping up today.

[sb9]

Another big acqusition on the way with capital raising

I'm picking this proposed acquisition gottta be quite huge for what they are capital raising.

[Rawz]

Based on the previous acquisition it's not that big. Raising AUS$22m will get say 8 centers?

I'm a bit surprised they are raising equity after announcing only a few weeks back that they are looking to pay dividends in the last quarter of this year. So we are funding our own dividends- cool.

Chris was supposed to be a guru at raising debt. Would have preferred no dividends and $22m more debt on the balance sheet- which it could absorb quite easily!

[Balance]

Based on the previous acquisition it's not that big. Raising AUS$22m will get say 8 centers?

I'm a bit surprised they are raising equity after announcing only a few weeks back that they are looking to pay dividends in the last quarter of this year. So we are funding our own dividends- cool.

Chris was supposed to be a guru at raising debt. Would have preferred no dividends and $22m more debt on the balance sheet- which it could absorb quite easily!

Industry is going through consolidation and whilst it would be really nice to get a sizeable acquisition for EVO to bulk up fast, I believe management prefers to add on bite size acquisitions whenever these become available.

And ready cash in the bank tends to secure the best deals when players are exiting the industry and selling out.

[Scrunch]

I'm picking this proposed acquisition gottta be quite huge for what they are capital raising.

That was my gut feeling also. Something small could have been funded from existing cash as only part of the $59m of cash at 31 Dec 2020 is effectively unavailable as needed to fund until the next MoE payment on 1 March and the $27m previously announced acquisition.

Something medium could have been funded from a combination of existing cash and a bit of drawn down bank borrowing and a liquidity facility.

The Chris's have decided what they have planned to buy is worth issuing around 20m new shares which will dilute their shareholdings from 24.6% to 21.5%. My guess is an acquisition is nearer $40m generating around $10m of EBITDA/yr.