In July this year Medical Australia Limited (ASX:MLA) announced that it was proposing to raise funds to finance the acquisition of Care Essentials through a non-renounceable rights issue.
Medical Australia Limited’s Board and Management team has since reviewed the company’s growth strategy and determined that raising additional capital at this time based on the current share price would be too dilutive for shareholders. As such, the company has taken the decision not to pursue the Care Essentials transaction.
Medical Australia Limited’s Chief Executive Officer Mark Donnison added: “While we would have liked to complete this transaction, Medical Australia Limitednow has a number of organic growth opportunities that we are pursuing that will deliver increased revenue and earnings that will more than supplement the revenue we would have gained from this transaction.
“We believe it is only prudent to pursue acquisitive growth when Medical Australia Limited’s share price is at acceptable levels and we are not diluting existing shareholders to such a great extent.
We are very encouraged by the organic growth prospects for Medical Australia Limited, particularly our recently announced OEM partnerships and our international distribution opportunities.”
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