Afterpay Touch is in a trading halt as it prepares to launch a $300 million placement for an “accelerated mid-term strategy,” while the company’s executive team is also selling $100 million worth of stock to a US investment firm.
The ASX tech darling said on Tuesday it has its sights set on raising a minimum $300 million through the placement of new shares to support its mid-term goal of achieving $20 billion in gross merchandise volume, as well as fuelling growth in the US, securing its UK launch, and further investing in its Australian operations.
The buy now, pay later provider told the ASX it would undertake a fully underwritten institutional placement at a floor price of $21.75 per share, which represents a 10 per cent discount on the June 7 close of $24.17.
Normal trading is expected to resume on Wednesday barring an additional announcement from Afterpay.
Concurrent with the placement, US cornerstone investors Tiger Management and Woodson Capital have agreed to buy a combined 2.5 million shares – or $100 million worth – from Afterpay founders Anthony Eisen and Nicholas Molnar, and group executive David Hancock.
“Our strategy remains focused on global merchant and customer growth, platform innovation and scaling our global infrastructure given an increased appreciation of the size of our global market opportunity and confidence in our differentiated value proposition,” the company said in a release on Tuesday.
A share purchase plan will follow the placement with eligible Afterpay shareholders in Australia and New Zealand entitled to subscribe for up to $15,000 worth of shares.
The share purchase plan aims to raise $30 million.
Afterpay shares have gained nearly 95 per cent so far in 2019 after more than doubling in price in 2018.
The company listed at $2.95 in 2017.
Afterpay says it currently has 4.3 million active customers and has been adding 7,900 new customers a day since December 31.
Its US business, launched 13 months ago, has generated $780 million for the 11 months to May 31, with 3,300 merchants active and another 1,100 in the process of signing up.
In the UK, Afterpay has completed a “soft test” under the Clearpay name and has 50 retailers signed up to its platform.
On Friday Afterpay shares were subdued after it disclosed it was in talks with regulators regarding its compliance with anti-money-laundering and terrorism financing rules.