Smartgroup Corporation Ltd Autopia And Selectus Acquisitions To Drive Growth

Autopia and Selectus acquisitions to drive growth: Smartgroup Corporation Ltd (ASX: SIQ) jumped up 13.13% on July 26, 2016 as the company completed the institutional placement to raise $54 million through issue of 7.65 million new shares. The proceeds will be used for SIQ’s recent acquisition of Selectus for $119 million in upfront consideration plus a further consideration of up to $50 million in August 2017. The group also acquired Autopia to grow SIQ’s leasing portfolio and expand client base in corporate segment. Autopia is expected to contribute ~$2.6 million EBITDA and ~$1.2 million NPATA in 2H CY2016. The group expects to report 1H CY16 revenue of over $60.5 million, which is a 35% rise as compared to the first half of 2015 and EBITDA rise of $25.5 million during the period, which is 42% rise from the same period of last year. Meanwhile, SIQ has a contract with Queensland government starting from 1st April 2016 and is for three years, with an extension option of two years even though the contract is not expected to materially contribute to SIQ’s 2016 earnings. Moreover, SIQ has acquired the selected assets of Trinity management group for the initial payment of $1.7 million and further payment is to be made in 36 months.

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