SKYDIVE THE BEACH JUMPS INTO $15.45 MILLION RAGING THUNDER PURCHASE
Written on the 30 September 2016 by James Perkins
SKYDIVE the Beach (ASX: SKB) has raised $18.98 million to purchase Raging Thunder Adventures through institutional investors as it pursues its goal to become the world's largest adventure tourism company.
The offer was at a price of $0.52 per share a discount of 10.3 per cent on the 27 September closing price. A total of 36 million new shares were offered. The company is trading up 9.48 per cent today, at $0.635 per share.
The money will fund the $15.45 million acquisition of Raging Thunder as well as new equipment, while also providing working capital. The price includes $11.95 for the business and its debt and a further $3.5 million for associated land and buildings. The price is a 3.95 multiple of earnings.
Institutional investors and retail investors took up 97 per cent of the entitlement offer, which was underwritten by Veritas Securities. Retail investors will have the chance to take up another offer that will be released on 5 October.
Skydive the Beach executive director Anthony Boucaut says, "The acquisition of RT is an excellent and exciting one for the company. RT is a strong strategic fit for SKB and the acquisition delivers on three of SKB's four strategic priorities: acquisitions, diversifications and efficiencies."
Raging Thunder, which was established in 1984, runs white water rafting, canyoning, hot air ballooning and barrier reef cruises out of Cairns in Far North Queensland.
It serves more than 100,000 tourists per year.
"Raging Thunder Adventures has built a solid reputation of providing memorable and sustainable adventure experiences within the world's most unique natural habitats. We are thrilled to be able to diversify our offering and bring these 'once-in-a-lifetime' adventures to more Australians and international visitors," says Boucaut.
Fellow Executive Director Anthony Ritter says: "Consumers today want to enjoy unique travel experiences that get their heart pumping and test their limits. Aligning with companies that share our values for safety, high-quality and sustainable adventures will fast track our growth and ensure that more people can enjoy those unforgettable experiences for themselves."
"We are on our way to becoming the biggest and the best adventure tourism and leisure company in the world," added Mr Ritter.
Skydive the Beach, based in Wollongong, has 18 drop zones in four Australian states and on the South Island of New Zealand. It was founded in 1999 and launched on the ASX in March 2015.
In its first full year as a listed company in FY16, it recorded revenue of $58.5 million, up 122.2 per cent on the previous year, and EBITDA of $13.46 million, up 123.4 per cent, largely due to an increased number of drop zones and the purchase of NZone Skydive and Skydive Wanaka in New Zealand.
The Raging Thunder purchase is expected to add $3 million to Skydive the Beach earnings each year.
Skydive the Beach will provide a 1c per share fully franked dividend to shareholders for FY16.