Corporate Travel Management (CTM) is well on its way to securing the funding it needs to take over a prominent US travel firm.
After announcing it would fund the acquisition of Travel & Transport by raising $375 million yesterday, CTM has already secured approximately $262 million of that figure via an institutional entitlement offer at $13.85 per share.
The offer garnered a take-up of roughly 90 per cent by eligible shareholders, excluding CTM founder and managing director Jamie Pherous, who declined to participate.
The next funding step for CTM is a fully-underwritten retail entitlement offer to raise the remaining $113 million, which will open on Tuesday 6 October 2020 and close on Thursday 15 October.
The entitlement offer will result in approximately 27 million new shares being issued in total, equivalent to approximately a quarter of CTM’s total shares outstanding upon completion of the offer.
Additional capital is also being raised by CTM to fund acquisition costs, integration costs, provide additional liquidity to fund potential Travel & Transport losses for a prolonged period, balance sheet flexibility, and provide capacity for other acquisitions.
The acquisition is expected to be completed in late October, and is subject to, amongst other things, antitrust approval and the receipt of a satisfactory fairness opinion by the trustee of Travel & Transport’s employee stock ownership plan.
