IPO Fact Sheet: The Hydroponics Company (ASX: THC)

IPO Fact Sheet: The Hydroponics Company (ASX: THC)

Overview                                 

The Hydroponics Company (ASX: THC) has made agreements to acquire and/or collaborate with several businesses within the medicinal cannabis space. THC intend to become a: leading provider of medicinal cannabis; worldwide manufacturer and distributor of hydroponics equipment, materials and nutrients; designer and constructor of large-scale hydroponic greenhouses.

Biz Structure

 

Offer Details

The company is raising $5-8m via IPO, with 25-40m shares issued at 20c each. Investors will be given 1 option for every 2 shares issued through the offer.

Leading the offer are Gleneagle Securities and Red Leaf Securities. The non-underwritten offer will open March 16 and is expected to close April 5th. Listing is anticipated April 20.

A secondary offer includes 33,450,000 options for founders, directors, seed investors, vendors and promoters.

 

Investment Highlights

  • Significant target markets for legal cannabis, with vast growth forecast (US: $20.6bn by 2020)
  • Extensive business expertise in cannabis breeding and growth (profitable operations)
  • A globally shifting legislative landscape promoting the cultivation and use of cannabis – the Australian government has approved the importation and prescription of medicinal cannabis
  • Managerial team with broad capabilities and experience
  • Multiple revenue streams – 600+ products and equipment sold internationally
  • Developing new products and targeting new markets
  • Eyeing growth through acquisition (indoor growing industry)
  • Vertically integrated business with an international production and distribution network
  • 9 registered trademarks and 2 patents
  • Currently attaining research and production licenses

 

Use of Funds

THC will predominantly use capital raised for the purpose of acquiring and developing target businesses involved with the production and distribution of medicinal cannabis and hydroponic equipment.

Funds have also been allocated to developing ancillary products and equipment, working capital, and other surplus costs. In the event THC raises $8m, $1m has been set aside for further acquisitions.

 

Capital Structure

After finalising the IPO, THC’s market cap will be $16.48m-19.48m. Upon listing, free float will be between 30.34% and 41.07%.

At the time of the prospectus, 35.4m shares were issued – 7m for a nominal consideration and 28.4m issued at 5c. While the shares of substantial holders may be subject to escrow for up to 2 years, other escrow arrangements are currently unavailable.

Options issued will be listed on the ASX and may be exercised at a price of 40c until December 31 2019. 26.5m performance shares are being issued to various parties.

Capital Structure 

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IPO Fact Sheet: The Hydroponics Company (ASX: THC)
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