Intelligent Monitoring Group Limited (ASX:IMB) has entered into an agreement to acquire all of the shares in Mammoth Technology Group (Mammoth) for $4.0 million upfront comprising $2.0 million in cash and $2.0 million in shares in the Company at an issue price of $0.25 per share under the Company’s available placement capacity under ASX listing rule 7.1.
Founded by Rob Hilton, an experienced marketer and entrepreneur, Mammoth is an Australian designer and manufacturer of IOT (Internet of things) connected security products, providing innovative security solutions to retail and wholesale customers and businesses under the brands Monkey Vision, Simple by Monkey Vision, Mammoth Security & Intellivision Ai+.
Products include 4G, Wi-Fi and industrial grade HD cameras, connected home solutions (i.e. CCTV, alarm sensors, doorbell system, lighting control), facial recognition, staff and visitor management systems, and Key customers include Bunnings, Pact Group, Glenvill Homes, RSEA and more.
This represents an expansion of IMG and Mammoth’s existing strategic partnership which has demonstrated synergistic cross-selling opportunities and enables the combined IMG business to offer its customers integrated security solutions including own branded security products, installations, and monitoring.
Mammoth founder and CEO Rob Hilton will join IMG as an Executive Director. Subject to shareholder approval, Rob Hilton is eligible for $2.0 million in performance rights, which are subject to the following vesting conditions:
- Rob Hilton remaining employed with IMG for a period of three years from the date of issue
- The IMG share price reaching $0.40 per share.
IMG intends to conduct a $10.0 million equity raising via an accelerated 1 for 1 non‑renounceable entitlement offer of fully paid ordinary shares in IMG (New Shares) to raise approximately $10.0 million (Entitlement Offer).
The offer price for the Entitlement Offer will be $0.15 per share (Offer Price). The Offer Price represents:
- 9.2% discount to the theoretical ex-rights price (TERP);
- 21.8% discount to the 5-day volume weighted average price (VWAP),
- 6.7 % discount to the last traded price of IMG shares.
Under the Entitlement Offer, eligible shareholders will be able to subscribe for 1 new ordinary share in IMG for every 1 existing share held at 7pm (AEST) on Tuesday, 24 May 2022 (Record Date) at the Offer Price (Entitlements). Entitlements cannot be traded on ASX or otherwise transferred.
The Entitlement Offer includes an institutional component (Institutional Entitlement Offer) and a retail component (Retail Entitlement Offer).
Bell Potter Securities Limited and Morgans Corporate Limited are Joint Lead Managers to the Entitlement Offer. The JLMs will be entitled to receive a:
- Management fee of 2% (plus GST) of all proceeds received from the Entitlement Offer (excluding proceeds received from Black Crane Asia Pacific Opportunities Fund (Black Crane))
- Management fee of 1% (plus GST) of the proceeds received from Black Crane.
Black Crane, an entity associated with the Company’s chairman Mr Peter Kennan, has committed to take up to $7.0 million of the Entitlement Offer, through taking up its Entitlement and through sub-underwriting the Entitlement Offer. The Company has agreed to pay Black Crane a fee of 5.0% on its total commitment.
Proceeds raised from the Entitlement Offer will be used to fund the cash component of the acquisition of Mammoth and the previously announced acquisition of AIS, together with transaction costs and working capital.
In conjunction with the acquisition of Mammoth, Dennison Hambling will transition from his current role as Executive Director to Managing Director to drive the company in its next stage of growth.
John Hallam has agreed to step down as CEO of IMG and will stay with the business until the platform and the operational improvements are complete. John joined the company as a consultant and acted as COO before becoming CEO. In that time the business has moved from being cashflow negative with multiple control rooms and systems and processes to a business which will shortly have a core platform and tight operating policies and procedures.