Listed Ecoya completed a $4.75 million placement yesterday, which will be used to partially finance last week's $10 million-$20 million purchase of natural skincare manufacturer Trilogy Natural Products.
Home fragrance company Ecoya, backed by the former 42 Below owners, listed on the stock exchange in early May, having raised $44.35 million.
Since listing at $1, Ecoya shares have traded around 80c and lifted slightly to 83c after yesterday's announcement.
Yesterday's placement, of 6.33 million shares at 75c each, which included an oversubscription of $250,000, was undertaken by major shareholder Business Bakery LP, interests associated with directors Rob Fyfe and Rich Frank and several unnamed institutions and high net worth investors.
Ecoya chairman Geoff Ross said the Trilogy purchase offered a "strategic fit with Ecoya's existing business and will deliver even greater upside for investors."
"This acquisition will considerably increase overall revenue and reduce Ecoya projected losses this year. We expect the combined entity to be profitable next financial year," Mr Ross said.
He also announced an offer would go out to shareholders later this month to participate in a share purchase plan, costing 75c per share, to raise up to $1 million, with the maximum per shareholder set at $15,000.
Ecoya announced last week it was purchasing Trilogy, paying $10 million now and with a further up to $10 million on offer (50-50 in cash and $1 shares) should management hit financial targets by the end of 2011.
"Trilogy is profitable and to the December 2009 calendar year, generated revenues of $9.3 million," he said.
Ecoya was confident of meeting its prospectus revenue forecast and was trading to plan and sales for the current year were around double for the same period last year, he said.
Trilogy was founded by Wellington sisters Sarah Gibbs and Catherine de Groot in 2002.
During 2006, 2007 and 2008 Trilogy featured in the Deloitte Fast 50 list and had 32% annual compound growth since 2006.
Its range of 40 products is sold in 3500 stores in 16 international markets throughout Australia, New Zealand, the UK, Ireland and Asia.
"Trilogy is a leader in Australasia and it shares similar views to us on natural ingredients and the emerging opportunities in the affordable luxury category," Mr Ross said.
