A day after closing another acquisition as part of its aggressive M&A growth strategy, Kanata software manufacturer Martello Technologies said Tuesday it’s raised $6.9 million to help finance the deal through a public share offering.
Martello, which makes software that helps customers detect and troubleshoot problems in their high-speed communications networks, said a group of underwriters led by PI Financial Corp. and Eight Capital have purchased 32,861,250 units at a price of 21 cents each.
Each unit consists of one common share and one purchase warrant that can be exercised within the next three years at a price of 30 cents per share. The company may also move up the warrant expiry date if Martello’s average share price is at least 50 cents for 10 consecutive days.
The latest offering comes about four weeks after Martello (TSX-V:MTLO) agreed to acquire Geneva-based GSX Participations in a cash-and-share deal worth $18.7 million. The transaction, which saw Martello pay $13.86 million in cash and hand over 22 million shares to GSX shareholders, closed Monday.
Martello said Tuesday that $4 million from the new share offering will go towards financing the transaction, with the rest being used for “general corporate purposes and working capital.”
The software company has achieved significant growth in monthly recurring revenues over the past several years from its subscription-based software that helps Mitel customers manage their communications networks.
GSX provides similar services to users of Microsoft’s 365 suite of products such as Outlook, SharePoint and Microsoft Teams and currently has more than 400 customers around the world. Martello CEO John Proctor called Microsoft customers a "huge market" for the company.
Martello also got some financial help late last month from its two high-profile co-chairs, Terry Matthews and Bruce Linton.
Matthews’ investment firm, Wesley Clover International, and Linton, its former CEO, agreed to loan the company $5 million to help meet the capital requirements of the GSX acquisition.
Martello’s shares were holding steady at 22 cents in mid-morning trading on the TSX Venture Exchange.