AVEVA announces multi-billion rights issue to fund OSIsoft acquisition

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AVEVA Group PLC (LON:AVV) has unveiled plans to raise around £2.84bn in a fully committed and underwritten rights issue to partly fund its acquisition of data management software firm OSIsoft, which was agreed in August.

The FTSE 100 industrial software provider said to raise the finds it will issue around 125.7mln shares at a price of 2,255p each, a 46% discount to its closing price on Thursday, and has been supported by Schneider Electric, which indirectly holds around 60% of AVEVA’s shares.

READ: AVEVA slides as earnings fall by over a third in first half

AVEVA previously agreed to acquire OSIsoft for an enterprise value of US$5bn (£4.2bn), with the money raised in the rights issue to be used to pay part of the US$4.4bn cash contingent of the purchase price, while the remaining US$0.6bn will be paid in shares to OSIsoft’s majority shareholder Estudillo Holdings Corp, controlled by the company’s founder J Patrick Kennedy.

AVEVA said that that acquisition will strengthen its position in the industrial software market and that there is a “significant opportunity to generate material revenue synergies”. The company also said regulatory and antitrust approvals are on tack and it expects to receive all approvals between December and February.

The rights issue followed the company’s half-year results on Thursday, where the firm reported a sharp fall in earnings but said its full-year performance is expected to be “resilient despite the challenging global economic environment”.

Shares in AVEVA were down 3.6% at 4,014p in early trading on Friday.

–Adds share price–

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