LONDON - Warpaint London PLC (AIM:W7L), a specialist in the color cosmetics industry, has announced a fundraising initiative to secure £14 million through the placement of new ordinary shares, the company disclosed Thursday. The proceeds are earmarked to finance the acquisition of Brand Architekts plc, a fellow beauty brand specialist.
The placement will offer 2,745,098 new ordinary shares at 510 pence each, a 2.67% discount to the closing price on Monday, representing about 3.53% of the current issued share capital. Additionally, Warpaint aims to raise up to £1 million through a separate retail offer, providing existing UK retail shareholders the opportunity to participate at the same price as the placement.
This strategic move follows Warpaint's announcement earlier today regarding its firm intention to acquire Brand Architekts, with the transaction being recommended unanimously by the Brand Architekts Board.
The company intends to use the net proceeds from the placement to repay bridging loans that funded the maximum cash consideration for the acquisition. The final cash consideration will depend on the final level of elections concerning the share alternative, as detailed in the earlier announcement.
Warpaint also provided a current trading update, indicating strong business momentum with year-end results expected to meet forecasts. Notably, the company has experienced significant growth in the US market, particularly from an initial order from Walmart (NYSE:WMT) for W7 and Chit Chat products. US revenue growth is projected at around 20% for the year, with a higher margin compared to the previous year.
In the UK, Warpaint anticipates an expansion of its W7 color cosmetics into additional Superdrug stores and a 150-store expansion in Tesco (OTC:TSCDY). Boots has also agreed to stock several gifting products for Christmas 2025. Following a successful launch in the Netherlands, Warpaint is expanding its product assortment in all Etos stores.
The placement, conducted by Shore Capital Stockbrokers Limited as the sole bookrunner, is not contingent upon the completion of the acquisition. The company may opt to use the funds for alternative investments or general working capital if the acquisition does not finalize. The retail offer is conditional on the placement, but the placement is not dependent on the retail offer.
Directors of Warpaint have expressed their intention to participate in the placement, with commitments totaling £582,499.
The new ordinary shares are expected to be admitted to trading on the AIM market of the London Stock Exchange (LON:LSEG) on Monday, December 10, 2024, with dealings commencing the same day.
This announcement is based on a press release statement and does not constitute investment advice or an endorsement of Warpaint London PLC or its securities.
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