Economic uncertainty is pushing Tecsys to issue a $ 20 million share offering to help Montreal-based supplier of supply chain management software support its growth.
Richard Dufour
The Press
The pandemic is generating new projects at Tecsys, whose customers are notably in the health sector, but also retailers who must rely more than ever on electronic commerce.
On the one hand, CEO Peter Brereton wants the money collected to reassure his customers. “We are about to enter a recession. We want them to realize that our balance sheet is rock solid so that they have no fear of us. "
On the other hand, Peter Brereton feels that the current context will create short-term opportunities not to be missed.
It is not clear what will happen in the next six months. Software companies are suddenly at risk of going on sale after encountering financial problems and we want to be ready to take advantage of these opportunities.
Peter Brereton, CEO of Tecsys
Tecsys announced Tuesday evening funding of $ 20 million. The company will issue 1.2 million new shares at a unit price of $ 17.25. This is a 12% discount from the share's closing price on Tuesday. Tecsys shares fell 8% to $ 18.08 on Wednesday in the wake of this announcement.
Legend
"This additional capital puts the financial balance sheet in very good health to allow Tecsys to make other acquisitions," said analyst Daniel Rosenberg, of the firm Haywood Capital.
In February 2019, Tecsys announced the acquisition of PCSYS, a Danish company specializing in software and equipment solutions for warehouse, transportation and labeling system management. Three months earlier, management announced the acquisition of OrderDynamics, an Ontario order management software company.
Online business
If the pandemic puts certain customers' projects on hold, Peter Brereton says that many retailers forced to close the doors of their business turn to Tecsys to help them quickly adjust their activities to online business.
There is never a "right" time to go for funding, admits Peter Brereton. "If you wait until you need the money to do it, you can't get it." After talking to shareholders recently, I understood that many of them wanted to hold more Tecsys shares, ”he says.
The six analysts who monitor Tecsys' activities all recommend buying the stock