PERTH: Teaminvest Private Group Limited announced that it has agreed to acquire 100% of the shares in Automation Group Investments Pty Ltd for an initial purchase price of approximately $2.66m; plus a deferred payment based on a percentage of revenue generated under a key contract for FY20 and FY21, payable after completion of the FY21 audit.

Among other conditions precedent, the Proposed Transaction is conditional upon the Company obtaining approval from its shareholders in respect of an indirect minority interest in Automation Group held by entities controlled by one of the Company’s directors, Howard Coleman.

If shareholders approve the Proposed Transaction, the initial purchase price will be settled by issuing shares in the Company to shareholders of Automation Group. The price at which shares will be issued will be the 30-day volume weighted average price (VWAP) for the period immediately prior to completion of the Proposed Transaction.

If shareholders approve the Proposed Transaction and all other conditions precedent are satisfied or waived prior to the general meeting, completion of the Transaction will be no more than 3 business days after the meeting. The deferred payment will be settled by issuing shares in the Company to the shareholders of Automation Group.

The price at which shares will be issued will be the 30-day VWAP for the period ending 30 June 2021. Similar to the initial purchase price, payment of the deferred consideration will also be subject to shareholder approval under ASX Listing Rule 10.11.1 which is expected to be obtained at the Company’s 2021 annual general meeting.

If this shareholder approval is not obtained, the deferred consideration payment will be settled by cash payment to the shareholders of Automation Group.

In addition to acquiring the issued capital of Automation Group, the Company has agreed to purchase approximately $0.6m of debt in Automation Group currently owed to entities associated with the vendors under the Proposed Transaction. This debt will remain in Automation Group and it is intended that the Company will receive a return on this investment in line with the existing repayment and interest schedule.

This debt is subordinated to Automation Group’s existing invoice financing arrangements. Completion of the debt acquisition will occur on 31 July 2020 and is not conditional on the acquisition of shares under the Proposed Transaction or related party shareholder approval.