viewThe GO2 People Ltd

The GO2 People to lodge capital raising prospectus this week ahead of acquisition

In a letter to shareholders today, GO2’s managing director has outlined the path to acquiring one of Australia’s fastest growing training organisations, Industry Pathways Pty Ltd (IPW).

capital raising concept
The suspension of shares is set to end after completion of the capital raising

The GO2 People Ltd’s (ASX:GO2) managing director Billy Ferreira has detailed an indicative timetable for the capital raising to fund the acquisition of IPW.

A prospectus will be lodged on Wednesday 10 July 2019 detailing a capital raising of up to $4.0 million through the issue of shares priced at 7.5 cents each with an attaching 10 cent option expiring in 12 months.

The capital raising will fund the earnings accretive acquisition of training organisation IPW for $5 million in cash and shares.

IPW generated $1.56 million in EBITDA in FY18 and is projected to grow these earnings by 28.2% to $2.00 million in FY19.

The purchase price represents a competitive 3.75x EBITDA multiple using the average of FY19, FY20 and FY21.

READ: The GO2 People outlines capital raising for acquisition of training organisation

In the letter to shareholders, managing director Billy Ferreira said: “We remain committed to completing this transaction as we see significant synergies through the merger of The GO2 People labour hire business and the IPW online training and education business.

“Combined, we intend to further evolve as a leading national, vertically integrated labour hire and training business with improved overall margins, significant cross-sell opportunities and continued growth.”

Recent restructure expects first EBITDA positive month in July

He added: “On 30 April 2019, we announced a restructure of the stand-alone GO2 business.

“I am pleased to reiterate that the financial results of our restructure saw the Company achieve an EBITDA neutral position for the month of June 2019.

“Furthermore, we expect our first EBITDA positive month in July 2019, creating the foundations from which we will build in FY20.”

Quick facts: The GO2 People Ltd

Price: 0.034 AUD

Market: ASX
Market Cap: $5.02 m

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