Calian to raise up to $86M in fresh capital to fund M&A push

Money falling

Riding a wave of acquisitions that have helped propel its annual revenues toward the $500-million mark, Calian Group is planning to raise as much as $86 million in a new share offering aimed at financing further expansion.

Calian (TSX:CGY) said Tuesday that underwriters Desjardins Capital Markets and Acumen Capital Finance Partners have agreed to purchase 1.24 million common shares in the Ottawa company at a price of $60.50 each for proceeds of about $75 million. 

Calian stands to raise an additional $11.2 million if the underwriters exercise their option to buy up to 186,000 additional shares within 30 days of the closing date. The offering is expected to close next week.

The Kanata firm says it plans to use the new funding to “pursue strategic growth initiatives, including acquisitions” as well as other general corporate purposes.

Calian, which provides services ranging from medical clinics to military training exercises, is on an acquisition tear of late.

The firm bought five companies in fiscal 2020, adding new product lines that accounted for nearly 90 per cent of its revenue growth in the last quarter. Three weeks ago, Calian closed its biggest M&A transaction to date – an $83-million deal for Toronto-based health-care IT firm Daposoft.

Calian, which posted revenues of more than $430 million last year, is now projecting fiscal 2021 revenues of between $460 million and $500 million, up from a top end of $480 million in its previous outlook.  

The company’s shares were down about five per cent to $60.69 in late-morning trading on the Toronto Stock Exchange.