LogiCamms Completes Acquisition and Capital Raising

iStock_000003992536 FinancialStockMarketASX Announcement – LogiCamms completes acquisition of MPA Consulting Engineers and $10 million capital raising, providing the company with new capabilities and services, additional revenue diversification and added growth capability.

LogiCamms Limited (“LogiCamms” “ASX:LCM”) is pleased to advise that it has successfully completed:

• the acquisition of MPA Consulting Engineers (Australia) Pty Ltd (“MPA”); and

• the issue of 12,500,00 ordinary shares at 80c per share to institutional and sophisticated investors of Hartleys Limited. The placement to raise $10 million was oversubscribed.

LogiCamms Managing Director Adam Keats said that the transactions provide LogiCamms with new capabilities and services, additional revenue diversification and added growth capability.

“LogiCamms is now positioned to provide an expanded range of services which will enable it to deliver larger and more comprehensive ‘turn key’ engineering projects, which have higher value for our clients, and for Logicamms” Mr Keats said.

“The MPA acquisition combined with the balance sheet strength provided by the placement provides LogiCamms with a springboard for growth.”

MPA Acquisition

The agreement to purchase MPA was announced by LogiCamms on 7 December 2009. MPA is an established, multidiscipline engineering firm that specialises in providing civil, structural and mechanical engineering design services for a blue chip client base in a wide range of industries. MPA’s range of services compliments LogiCamms’ existing electrical, control and process engineering specialist business.

LogiCamms anticipates that MPA will deliver earnings after tax (on a normalised, annualised, standalone basis) of between $2m and $2.4m for FY2010. The acquisition also brings additional project opportunities to LogiCamms’ sales pipeline.

The total consideration for 100% of the share capital of MPA is approximately $10.8 million, which consists of $5 million in cash and the issue of 6,846,746 ordinary shares to the vendors of MPA at an issue price of 85c per share. The shares issued to the vendors equate to approximately 11.4% of LogiCamms’ share capital (on a post-placement basis). The vendors have agreed to voluntarily escrow their new shares for a period of six months.

MPA’s key executives will be retained on service and consultancy agreements that have a minimum term of three years.

“The MPA acquisition is a strategic move designed to enhance LogiCamms’ ability to secure larger contracts,” Mr Keats said.

“Separately the companies were operating as successful engineering services businesses, but combined, they will allow us to target previously untapped opportunities.”

“We have had a long standing working relationship with MPA and we are excited about the opportunity to integrate the MPA business, adding to LogiCamms’ potential for growth in the Australian market place.”

Capital Raising

LogiCamms has successfully completed the capital raising announced on 18 December 2010.

LogiCamms has raised $10 million through the issue of 12.5 million ordinary shares at an issue price of 80c per share to institutional and sophisticated investor clients of Hartleys Limited. The offer was oversubscribed.

LogiCamms has used $5 million of the funds raised to pay the cash component of the acquisition consideration for MPA.

The balance of the funds raised will be used to strengthen LogiCamms’ balance sheet and pursue future growth opportunities. The issue of shares to the vendors of MPA and the placement was approved by LogiCamms’ shareholders at an Extraordinary General Meeting on 21 January 2010.

“The balance sheet strength provided by our recent capital raising ensures we can act with certainty and agility on new opportunities,” Mr Keats said.