M&A: Seven West invests $10m in Raiz while Thorn Group and Credit Crop exchange Radio Rentals
Link copied to
The ASX’s M&A boom looks set to continue into Christmas with two further deals announced this morning.
Raiz (ASX:RZI), which runs an investing app focused at millenials allowing them to invest small amounts of money, unveiled a $10 million investment from Seven West (ASX:SWM) that will result in Seven acquiring a 6.6% stake.
Raiz says the companies will work with Seven, utilising the latter company’s media reach to attract more customers and scale up from its existing $1 billion funds under management.
Seven West declared Raiz was an exciting investment opportunity.
“We have followed the Raiz story since launch and have been very impressed by what founders George Lucas and Brendan Malone and their Raiz team have achieved scaling the business,” said the boss of Seven’s venture arm Alan Stuart.
“Similar to previous strategic investments, we believe by leveraging the power of our media assets across SWM we can help drive that next leg of growth for Raiz, building greater brand trust, awareness and adoption across Australia.”
One previous investment was Airtasker (ASX:ART) which it bought into in 2016 before selling out at the start of this year as part of the company’s listing.
Raiz also welcomed the deal.
“This investment by Seven into the Raiz business is a strong endorsement of Raiz’s business model and management’s ability to execute,” said joint CEO Brendan Malone.
“After extensive discussion with Seven, we have concluded that its media assets and reach are an excellent means to promote Raiz’s products and services to achieve the accelerated growth we require.”
Raiz’s ASX shares rose nearly 7% today and is up 78% in the last 12 months. However it is trading at a slight discount to its $1.80 IPO price.
Radio Rentals was founded in 1937 and has rented out household appliances.
While COVID-19 saw the permanent closure of its brick and mortar stores its business model has pivoted to delivering goods direct to people’s doors.
Thorn says the proceeds, will help it expand its business and consumer lending finance offerings and the says the deal represented an excellent outcome for shareholders.
The latter company also hailed the deal, saying it would be the ideal platform to accelerate its move into online retail.
Thorn Group shares rose by as much as 15% this morning while Credit Corp rose by 8%.