Dicker Data looks to raise AUD$40 million with corporate bonds

Dicker Data, the publicly listed distributor, has announced it's offering corporate bonds to raise AUD$40 million.

In an ASX announcement, the distributor said it will undertake a five year floating rate unsecured corporate bond offering in order to raise the funds.

Dicker Data says the net proceeds of the shares will be used to 'reduce existing bank debt' and for 'general corporate purposes'.

Furthermore, Dicker Data says the bond offering will increase the tenure of its debt maturity profile and diversify its debt funding sources.

David Dicker, Dicker Data chairman and CEO, says this move reflects the company's active approach to capital management.

"This bond issue is an important initiative for our company which reflects our determination to ensure that we have multiple sources of funding and the security of longer term debt.

"We look forward to establishing relationships through the bond issue with many new investors who will have a stake in the ongoing success of our company," he says.

The Lead Arranger for the transaction is FIIG Securities Limited.

Mark Paton, FIIG Securities CEO, says the company is pleased to assist Dicker Data to diversify and lengthen the duration of its debt funding.

"Dicker Data is a clear leader in its industry and its offering is another positive development for the expanding Australian bond market for mid-sized corporates," Paton says.

Dicker Data became a public company in January 2011. In early 2014, the distributor acquired competitor Express Data, and in the six months to December 2014 grew sales by 121.8% and hit AUD$498.3 million of revenue. Overall the company had a net profit of AUD$2.3 million.

Buying Express Data at the beginning of the year increased the staff count from 100 to 460.

However, a 'progressive reduction in headcount' in the latter half of the year has brought the current number of employees down to 350. This was a significant part of the company's AUD$4 million restructuring bill. 

The bond offering will only be open to eligible professional and sophisticated investors, according to the statement, and no prospectus or other disclosure documents in relation to the bond will be lodged with the Australian Securities and Investment Commission or any other regulatory authority.