Invocare (IVC) capital raising

Stock

Invocare $13.91 as at 11/03/2019

Event

The funeral operator we’ve flagged a few times although missed the boat ourselves is back on market today after raising capital to give them some balance sheet flexibility. A good move by IVC – since the January low of ~$10 the stock rallied to around $15 as shorts were forced to cover on better than expected results. The pop in share price has enticed them to raise capital and get their balance sheet back in order. Their net debt-to-ebitda was sitting around 3x and they need to keep it below 3.5x. The ~$85m will get that ratio back closer to 2x giving them flexibility to continue to buy smaller funeral operators. The shorts had been feasting on IVC for a while, and while they may cheer today, the rally over the past 2 months has been aggressive – that said, shorts still sitting at 11.7% of issues capital or around 13m shares.

The capital raise consists of an Institutional Placement which has raised $65 million at $14.00 with stock coming online on the 14th March, while they’ve also announced a Share Purchase Plan (SPP) for existing retail shareholders. Those who held shares on the 7th March will have the chance to buy up to $15,000 worth at $14.00, with more details to be sent to shareholders shortly.

Invocare (IVC) Chart

 Invocare (IVC)

Market Matters Take/Outlook

 

 

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