The LiveTiles Ltd (ASX: LVT) share price won't be able to take advantage of the positive investor sentiment today due to being placed in a trading halt this morning.
The intelligent workplace platform provider's shares are expected to be offline until Thursday.
Why are LiveTiles shares in a trading halt?
This morning LiveTiles requested a trading halt pending the release of an announcement relating to a material acquisition and capital raising. The capital raising will involve a placement to institutional and sophisticated investors.
According to the release, LiveTiles has signed an agreement to acquire 100% of Denmark-based software company Wizdom for an aggregate purchase price cap of €30 million ($47.6 million).
The release explains that: "Wizdom is a leading 'plug and play', Microsoft-aligned digital workplace software business. Its software provides users with the tools needed to drive employee engagement, collaboration and compliance. Wizdom will enable LiveTiles to deliver new capabilities in relation to news and content publishing as part of its intelligent workplace platform."
Wizdom has a strong European footprint and at the end of December had achieved annualised recurring revenue (ARR) of $8 million, which will increase LiveTiles' ARR by 35% to $30.9 million.
It has 243 customers across Europe and the United Kingdom, including the likes of Nokia, Syngenta, Saxo Bank, De Beers and Anglo American. Management intends to leverage this to fast-track its expansion into the region.
Capital raising.
In order to fund the acquisition the company is launching a placement of shares to institutional and sophisticated investors. Under the placement, a minimum of $15.3 million will be raised (before costs) via the issue of 45 million fully paid ordinary shares.
The placement price will be determined by an institutional bookbuild, with a variable price range of 34 cents to 37 cents per share. LiveTiles' shares last traded at 39.5 cents.
Should you invest?
While it remains a touch too soon for an investment for me, I do see a lot of value in this acquisition and believe it could help take LiveTiles to the next level.
Overall, I think it is one to watch carefully this year along with Atomos Ltd (ASX: AMS) and Volpara Health Technologies Ltd (ASX: VHT).
