Johns Lyng Group Ltd (ASX: JLG) shares are rocketing in early afternoon trade, up 19% to $8.52 per share.
This comes as the integrated building services company exits the ASX trading halt it entered last week on Tuesday 7 December.
Below we take a look at the company’s capital raising announcement that looks to be spurring ASX investor interest.
What capital raising announcement was reported?
Johns Lyng shares are charging higher after the company reported it had completed the institutional component of its equity raising.
The institutional placement and institutional entitlement offer together raised a combined $221 million.
According to the release, the capital raised will be used to fund the acquisition of Reconstruction Experts and to ensure Johns Lyng and Reconstruction Experts “maintain financial flexibility to fund their near-term growth initiatives”.
96% of eligible institutional shareholders took part in the institutional entitlement offer. This raised $34 million with new Johns Lyng shares priced at $6.80.
The fully underwritten placement raised the remaining $187.5 million. New shares were issued via a variable price bookbuild, and with strong demand, cleared at the top of the range at $7 per share.
A total of 26.8 million new shares will be issued under the placement. The company expects settlement to occur Monday 20 December, with the issue of those new shares to occur the following day, when shares are also expected to commence ordinary trading.
Commenting on the equity raising, Johns Lyng’s CEO, Scott Didier said:
We believe the Reconstruction Experts acquisition is the perfect fit for us to unlock the US market. The existing management are extremely motivated and excited to join our partnership model and the business represents exciting growth opportunities. The recognition and support of investors through the institutional component of the equity raising signals a clear endorsement from the market of our strategy.
Shareholder approval is not required with the issue of the new shares under the placement.
Johns Lyng shares could also be getting a boost today from the company’s announcement that retail shareholders “who have a registered address in Australia or New Zealand as at 7 pm” today can participate in the entitlement offer at the same offer price as under the institutional entitlement offer.
The retail entitlement offer opens this Wednesday and closes at 5 pm on Thursday 30 December.
How have Johns Lyng shares been performing?
Johns Lyng shares are up a whopping 162% in 2021. That trounces the 11% year-to-date gains posted by the All Ordinaries Index (ASX: XAO).
Over the past month, the Johns Lyng share price is up 20%.
The post Johns Lyng (ASX:JLG) shares surge 19% out of trading halt. Here’s why appeared first on The Motley Fool Australia.
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More reading
- Johns Lyng (ASX:JLG) share price in focus amid capital raise and major US acquisition
- What’s going on with the Johns Lyng (ASX:JLG) share price today?
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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