Evolve Education (ASX: EVO) is undertaking a NZ$63.5 million capital raising and small cap fund manager Regal Funds Management is one of the big buyers.

Regal bought NZ$9.55 million ($9.03m) worth of Evolve shares taking its stake from 16.62 per cent to 26.79 per cent. Also investing was New Zealand’s Accident Compensation Corporation which bought a 7.77 per cent stake for NZ$2.8 million ($2.65m).

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The institutional component of the offer is now complete but a retail entitlement offer is still open. The money raised will help the company repay NZ$30 million in debt and acquire 12 childcare centres in Australia.

It will also implement a turnaround plan for its New Zealand operations which will seek to reduce turnover of staff and families. It will modify its portfolio of centres, repair existing centres and implement customer support strategies.

Evolve is yet to release its full-year results but has indicated its pre-tax earnings will be between NZ$13.2 million and NZ$13.6 million ($12.5m-$12.9m). But it anticipates an after-tax loss of NZ$100 million. The company blamed the majority of this on a goodwill impairment.

There are over 50 New Zealand based companies listed in Australia; some dual-listed (like Evolve), others having completely moved across the Ditch (most notably Xero).

This has occurred as Kiwi companies seek capital opportunities they would not gain at home – New Zealand has gone 24 months without an IPO. So while we can share lamb, the same can’t be said about our stock exchange.


In other ASX small cap corporate news today

Speaking of New Zealand, its financial year being 1 April-31 March means ASX-listed Kiwi stocks are releasing their full year reports. One was business travel manager Serko (ASX: SKO) which exceeded management expectations with total revenue at $23.4 million and a net profit after tax of $1.6 million.

The results occurred as Serko saw increased customer uptake and revenue per booking as they entered Northern Hemisphere markets.

Serko admitted it would need investment to cope with demand in new markets. However, Serko believed its current cash reserves were enough for its investment needs.
Two other institutional buys caught Stockhead’s eye this morning. Yarra Funds Management already had a 6.25 per cent stake in Imdex (ASX: IMD) but last week spent $7.4 million to take their stake to 8.10 per cent. Perth-based fund manager WestOz became a substantial holder of cloud computing stock Empired (ASX: EPD), having paid $2.5 million throughout May.