The Agency secure McGrath rebels Top Level with $8.4 million share placement
The Western Australia-based The Agency have finally secured the funds to secure Top Level Real Estate, run by the east coast McGrath rebel agents.
It is via a complicated $8.4 million share placement, along with $5 million of Top Level debt to be converted into shares at $0.01 per share.
The extensive documentation advised total debts of Top Level currently sit at $26,993,812, and immediately following the deal will be $18,760,100.
It's less than the simple outright $10 million capital raising being sought to fund the purchase, which they continually delayed.
John Kolenda emerges as the key player, with his share holding rising from his initial 5.4 percent on the initial 684 million shares on issue.
After the latest deal the non-executive director John Kolenda will have a 19.9 percent stake, subject to shareholder approval.
On Monday The Agency announced the acquisition was imminent, with a trading halt put in place for the listed company.
The Agency have all up secured $13.4 million in new equity.
Shares were last trading at $0.11, and rose to $0.12 in early trading today.
There will be 103,808,962 shares on issue, along with 6,558,092 options.
Matt Lahood, who set up Top Level with fellow former McGrath agents, is set to be executive director and on The Agency board.
He said he sees many benefits linking the two businesses.
"The past 15 months has been a period of exceptional growth for both businesses, and we look forward to continuing on this upward trajectory with The Agency to become Australia's leading disruptive, high-growth real estate agency," Lahood said.
"The whole industry is watching and talking about us, because of what we have achieved, and I expect that interest to only intensify as the combined, well-funded, entity continues its growth momentum."
The document ts affirm the 75%-25% commission split for its agents.
"I am delighted to be supporting a business such as The Agency and I'm excited about its potential as a significant disruptive force in Australian real estate," Kolenda said.
Post fundraising and completion of Top Level acquisition, The Agency market capitalisation, at $0.30 per share, will be $30 million.
The Agency will comprise a national real estate business with two prominent brands (The Agency and Sell Lease Property).
They will have 300 sales representatives across Perth, Sydney, Melbourne and the Gold Coast, +4,000 properties under management and a mortgage book of over $1.1 billion.
The Agency's managing director Paul Niardone said the firm funding commitments was an important move for the company.
"This placement is a major step forward for The Agency, strengthening our balance sheet while providing us with the funds to progress the Top Level acquisition and expand The Agency and Sell Lease Property businesses nationally," Niardone said.
"It also provides funds for further acquisition opportunities in Western Australia and Sydney, where we have attracted a number of enquiries from Real Estate businesses wishing to merge into The Agency."
"The acquisition of Top Level will result in the addition of a highly experienced east coast real estate sales and project marketing team, significant property management portfolio and extensive sales pipeline.
"It is a game-changer for The Agency and will further cement our position as the fastest growing disruptive real estate group in the country.
"Top Level, which has been trading as 'The Agency' on the east coast of Australia since launching in March last year, has established, with our support, a significant business in a short period of time, surpassing our recruitment and sales targets.
"Combined, its founders - Matt Lahood, Ben Collier, Steven Chen, Shad Hassen and John Kolenda - bring over 100 years of real estate and finance experience to the business."
"Post the Top Level acquisition, the Company will have a strong footprint in the Perth and Sydney residential property markets, with offices in Melbourne and on the Gold Coast and plans to expand into Canberra, South Australia and further expand its Western Australian options."
