By Venture Life Group plc
Investors gain 9% return on convertible bond in AIM-listed business
Venture Life Group plc has acquired Periproducts in part thanks to the funds raised through UK Bond Network, the UK’s first peer-to-peer bond auction platform, and in conjunction with its existing shareholders. The bond auction, which closed on Wednesday 2 March generated a total of £1.9 million for the company via a convertible bond. Investors who competed to take part in the bond issue will earn 9% per year for the three-year period of the bond.
AIM-listed Venture Life Group, an international healthcare group addressing the self-care needs of the ageing population, is using the funds to acquire Periproducts Ltd, an oral care products company, for total consideration of about £5.6m. The balance of the consideration has been funded through the issue of new ordinary Venture Life shares worth a total of £1.7m, and existing cash resources.
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In addition to providing 9% gross annual interest, the bond is convertible into the company’s listed equity at a 25% premium to the placing price of the shares placed as part of the £1.7m equity raise which was conducted alongside the bond issue. Venture Life can repay the bond at any time from 3 March 2018, with mandatory repayment of the principal amount required on 3 March 2019.
Importantly, this convertible bond offers growth company investors a method of obtaining exposure to the potential upside in Venture Life’s equity, whilst benefiting from a level of downside protection afforded through the debt structure.
Chris Maule, CEO and founder of UK Bond Network, said:
“In this low interest rate environment, many high net worth and sophisticated investors will be searching for yield and SME bonds in listed companies with a compelling business model offer an interesting option.”
“This convertible bond for Venture Life Group – an international healthcare company with a market capitalisation of over £20m – has proven to be an attractive opportunity for investors, and we as a business are pleased to be able to support Venture Life in completing their acquisition.”
Jerry Randall, CEO of Venture Life Group, said:
“The funding delivered by UK Bond Network helped us to complete the acquisition of Periproducts and further drive our growth and expansion. While as an AIM-listed business we can raise money through the equity markets, we were drawn to UK Bond Network because of its flexible and innovative debt financing option. We were impressed by the platform’s transparent, clear approach and the certainty afforded by having the bond underwritten.”
Periproducts is a UK-based oral care company with a range of premium products including mouthwashes and toothpastes. The company recorded a turnover of £2.8m and profit of £0.2m in the year ending 30 November 2015 (both figures unaudited). Venture Life Group has identified a number of opportunities to drive Periproducts’ growth in the UK and overseas following the acquisition, and expects the acquisition to be earnings enhancing in the first full year of ownership.