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cybersecurity play FirstWave Cloud Technology has agreed an all scrip deal to acquire network management and IT audit software provider Opmantek, and is asking investors to help fund associated costs.

The Opmantek acquisition .... would see FirstWave issue up to 691 million new shares as consideration worth about $60 million as at the last closing price.

FirstWave told investors that Opmantek made $4 million revenue and $800,000 EBITDA in the year to June 30, from the sale of its enterprise grade software to telcos and managed service providers. Opmantek was established in 2011, based in Australia with offices in the US and Mexico and had 26 full time employees.

Putting the two together, according to FirstWave, would create an
end to end solution for network discovery, management and cybersecurity. It would just about double the number of FirstWave shares on issue. The combined company would have had $12 million revenue in the 2021 financial year, on a proforma basis, and enough cash to reach cashflow breakeven, it told potential investors.

FirstWave was seeking to raise $7 million at 7¢ a share to help pay associated transaction costs and repay a $1.5 million Opmantek loan.

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Capital raising of $14m is to be raised under the Offer via:

  • Two Tranche Placement of approximately 100m shares (representing approximately 13% of issued capital) to institutional and sophisticated investors to raise approximately $7.0m. The Placement will consist of two tranches, tranche 1 will be approximately 40 million ordinary shares ($2.8m) , while tranche 2 will be approximately 60 million ordinary shares ($4.2m)
  • A 3 for 23 Non Renounceable Entitlement Offer of approximately 100m shares to existing shareholders as of the Record Date to raise approximately $7.0m

Offer Price of $0.07 per new share
• Transaction costs $4.0m (cash consideration $1.3m, advisory, underwriting and other transaction costs $2.7m)
• Repayment of Opmantek loan $1.5m
• Integration costs $1.2m
• Working capital $7.3m expected to fully fund the combined business to cashflow break even

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