9th September 2009. Ironbridge and Bravura (ASX: BVA) have finalised a recapitalisation deal, resulting in interests associated with Ironbridge, one of Australia’s leading private equity firms, acquiring up to 46% of Bravura in equity and options.
The recapitalisation follows a proposal by Ironbridge in April 2008 to acquire Bravura for A$272m, or $1.73 a share (an 18% premium to the previous days trade), following its exposure to margin calls and the collapse of broker Lift Capital. Accepted by the board of Bravura, the acquisition failed to complete when Bravura missed earnings targets within the term sheet. When the recapitalisation proposal was announced in May 2009, Bravura was trading at 17.5 cent a share.
The recapitalisation, voted on by Bravura shareholders in July, and concluded in September 2009, is one of Australia’s most significant PIPE deals (Private Investment into Public Enterprise), and includes:
– a non renounceable rights issue raising $33.4 million fully underwritten by wholly owned or affiliated subsidiaries of Ironbridge Capital, and to be used to reduce Bravura’s loan obligations by half;
– in return for the underwriting agreement, a grant of options to Ironbridge entitling it to subscribe to $13 million of Bravura shares at 15 cents a share;
– Ironbridge lending funds to entities controlled by Bravura Directors and Group CEOs Iain Dunstan and Simon Woodfull, resolving a long-standing conflict over the ownership of a share parcel that represents a 30.5 per cent interest in Bravura, created by margin loans with the collapsed financial services firm Lift Capital. Through an agreement with liquidator McGrath Nicol, the plan proposes to transfer Lift’s entitlements to the shares to Ironbridge, along with the margin loans;
– the appointment to the board of Neil Broekhuizen, a managing partner of Ironbridge Capital and Matthew McLellan, a director of Ironbridge Capital.
Commenting on the completion of the Recapitalisation Proposal, Bravura’s Chairman, Mr Chris Ryan stated: “I am delighted that the Recapitalisation Proposal first announced on 18 May 2009 is now fully implemented. It has substantially strengthened our balance sheet, provided operational stability and removed the Lift Capital uncertainties. “I would once again like to take this opportunity to thank shareholders for their continued support of Bravura during what has been a challenging 14 months.
Bravura is now in a stable financial position and the Board is focused on strategies to enhance cash flow and earnings in the medium term.”
Bravura Solutions was established in 2004 to acquire and run the wealth management business unit of CSC Australia Pty Ltd. It has since made a number of acquisitions, and listed on the ASX in 2006.
Bravura is a leading global supplier of superannuation and pension, life insurance, investment and portfolio administration software, as well as business and strategic consulting services. Bravura Solutions provides software and support to more than 180 financial institutions globally, with a range of corporate clients in Australia, UK, New Zealand, Hong Kong, South Africa and Europe.
Revenue to 30th June 2009 was A$133m, 64% sourced from Europe and the UK, with EBITDA of A$16.1m.
Ironbridge is a leading independent Australian private equity manager, managing funds in excess of A$1.5 billion on behalf of Australian and international institutional investors. Ironbridge is focused on investments in medium to large sized management buyout and expansion capital transactions in Australia and New Zealand. Ironbridge targets management buyout and expansion capital opportunities, typically in the $250 million to $750 million range. Ironbridge was formed in 2003 by former Gresham Private Equity partners Neil Broekhuizen, Paul Evans, Julian Knights and Greg Ruddock