AIM-listed, UK-headquartered mobile banking player, Monitise, has confirmed a £100m dash for cash (see Monitise to monetise more investor interest) with the news that just over a third of that sum (£34.2m to be precise) will be placed with institutional investors at 30p a share (fully underwritten) with the £65.8m balance to be raised in a partially underwritten conditional placing. Cannacord is running the book for both. The placing price is about a 10% discount to recent trading.
Monitise also announced a couple of small acquisitions. The first sees it buying out the remaining shares of loss-making mobile check-out apps firm Mobile Money Network Limited in a £15m all share deal valuing MMN at £30m. Monitise also acquired mobile point of sale solution firm eMerit Solutions for up to £2.5m, also in shares. No comment was made on eMerit's profitability but I think we can take an intelligent guess.
CEO Alastair Lukies also came clean on what we had suspected in our prior post – that although the extra funding should accelerate top line growth, there will now be a ‘slight delay’ in near-term profitability. Earlier this year Lukies had forecast that Monitise would be cash break-even in 2013 and EBITDA positive by the end of that year (see Monitise – can two losses make a profit?).
I can understand the urgency of the land-grab. I just wish I understood how and when they will actually make money.