CORUM Group Limited says it plans to "accelerate key product development and business expansion" after issuing 60 million shares to Arrotex in a $3.3 million capital raising (PD breaking news).
Arrotex is Australia's largest generic and private label OTC supplier, servicing 3,400 pharmacies across the country.
The move is the first investment in a listed company by Arrotex, and involves a "placement agreement" for the issue of the new shares at 5.5c each, a 21% discount to the Corum share price when its trading was halted (PD yesterday).
Arrotex Executive Chairman, Dennis Bastas (pictured), said "we believe Corum is ideally positioned as a technology platform provider to Australian pharmacy and related healthcare sectors," confirming that as part of the transaction he would join the Corum Group Board.
He said he looked forward to assisting the company to "create enhanced shareholder value".
A previous proposed 63 million share issue by Corum to BAMM Group Administration Pty Ltd, the company linked to Pharmacy4Less owners Feras and Assad Karem, was terminated earlier this month (PD 02 Nov), under a now dropped deal under which BAMM was to advise Corum on the development of a cloud-based Head Office pharmacy software solution.
That project is now set to be completed in-house by Corum, the company said earlier this week.
Corum also raised several million dollars about six weeks ago (PD 29 Sep) in a rights issue which helped it take 100% control of the PharmX electronic ordering gateway.
Corum Group Chairman Nick England said "we are excited to welcome Arrotex as a strategic shareholder and an industry leader in Dennis Bastas to the Board.
"Corum now has the people, relationships and capital to execute its growth strategy," he said.
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