RPM Automotive Group attracts new substantial holder in Collins St Value Fund
Published: 16:48 26 Aug 2021 AEST
RPM Automotive Group Ltd (ASX:RPM) has gained a new substantial holder in Collins Street Asset Management’s ATF Collins St Value Fund (CSVF) which holds more than 8.333 million shares for a 6.25% stake.
Melbourne-based CSVF became a substantial holder on August 25 after making a strategic investment in the auto aftermarket company with the shares priced at 30 cents each for a total value of $2.5 million.
Last week, RPM Automotive Group executed an agreement with CSVF that will provide $8 million to support the company’s ambitious growth strategy.
As well as the $2.5 million investment, this includes the provision of a competitive three-year $5.5 million unsecured convertible note (CN).
RPM plans to use these funds to progress its pipeline of large-scale, EPS accretive acquisitions.
Funding package
Co-founder and managing director Clive Finkelstein said: “Over the next 12 months RPM intends to continue its strategy of growth via strategic acquisitions.
“This funding package has been set on attractive terms to our shareholders and provides RPM with the capital necessary to take advantage of attractive M&A opportunities while introducing a well-respected institutional investor onto our register.”
Convertible note
The $5.5 million CN is subject to shareholder approval for its conversion and this will be sought at a general meeting to be convened for this purpose.
It is convertible at 35 cents per share by CSVF at any time over the term of the CN. Moreover, it is convertible at this amount by RPM at its discretion if RPM’s share price trades at $0.50 or higher for 30 consecutive days.
The CN pays a coupon rate of 3.5% pa quarterly in arrears in cash or shares, issued at the 30-day VWAP, at the company’s discretion.
CSVF founder and chief Investment officer Vasilios Piperoglou said: “As a concentrated fund we don’t back many teams.
“RPM has proven that they possess the right entrepreneurial management team and maintain a sustainable and scalable business model.
“Especially in today’s markets, we are thrilled to have identified and invested in RPM, a company that offers a great growth strategy, and appears to offer clear value.”
High ranking fund
The Collins St Value Fund provides a different approach to the management of Australian equities. ‘Boutique by design, bespoke by nature’, the fund seeks to challenge the status quo to deliver investor outcomes and manages a concentrated portfolio.
In 2020 the fund ranked the #1 Australian Equity Fund according to the MercerInsights survey, having ranked #4 the previous year. It also ranked second for Financial Year 2021.
As of July 31, 2021, the fund is ranked #1 in its category over 12 months, three years and five years, according to Morningstar data.
