Rosebank set for 30% higher market cap after acquisition, equity raise
Rosebank Industries PLC on Friday anticipated a 30% jump in its market capitalisation upon readmission to London’s junior market in the third quarter of this year.
The London-based acquisitions vehicle is in the process of a reverse takeover of Electrical Components International Inc, a St Louis, Missouri-based electrical manufacturing firm.
Back in June, Rosebank confirmed plans to raise £1.14 billion via institutional and private placements priced at 300 pence per share. This was in addition to a €8 million open offer, and new loans worth $900 million, to fund the acquisition of ECI.
As of Friday, the company expects to issue around 406.6 million new shares, and estimated its market cap will rise to £1.22 billion from its current £924.8 million.
Rosebank said its cash offer valued ECI at $1.9 billion and represented 9 times the 2025 guide figure for earnings before interest, tax, depreciation and amortisation.
The takeover is intended to ‘significantly’ improve ECI’s cash generation through profit improvement, working capital optimisation and reducing leverage, Rosebank asserted. The company added that the takeover was ‘the ’first step in Rosebank’s journey and management has identified numerous further acquisition targets for its ’buy, improve, sell’ model.‘
This is similar to the business model that took Melrose Industries PLC into the FTSE 100 index.
Rosebank noted its deadline to publish half-year results is September 30.
Rosebank shares were 0.8% higher at 325.50p each on Friday morning in London.
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