To fund its global expansion strategy, environmental technology company Envirosuite (ASX: EVS) has unveiled a $14 million equity raising to boost development and distribution of its omnis and water solutions.
The company has launched an accelerated non-renounceable entitlement offer and institutional placement.
Under the institutional placement, Envirosuite will issue 94.1 million shares at $0.085 to raise $8 million.
The issue price is a 19% discount to the company’s last traded price of $0.105 on the 21 May.
The non-renounceable entitlement offer is for 70.9 million shares to raise $6 million at the same $0.085 issue price.
This entitlement offer gives eligible shareholders the right to subscribe for one new share for every 14.5 shares held.
Envirosuite’s environmental management technology provides industry with software as a service, and solution as a service products to assist in managing and mitigating environmental impacts such as noise, vibration, odour, dust, and air and water quality.
The company says its solutions also help organisations go beyond compliance and make decisions to minimise costs.
Envirosuite’s omnis technology is utilised across 190 sites within mining and industry, waste and wastewater sectors.
The aviation solution is at 161 airport sites, while the water treatment offering is at two sites after its launch in November last year.
The products work by collecting data such as flight tracking, noise, water, vibration, weather, dust and air quality.
Machine learning, science and algorithms are then used to provide customers with predictive modelling, real-time alerts, automated compliance analysis and insights.
From this information, companies can then make informed decisions that optimise operations, increase production, cut costs and provide them with their social licence to operate.
Envirosuite says the current addressable market for its product suite is US$4 billion, with the sector for its water treatment product believed to be valued at US$2.8 billion.
The company’s next largest market is estimated at US$1.2 billion for its omnis solution, with aviation product opportunities believed US$194 million.
Envirosuite’s annual recurring revenue (ARR) is currently around $42.5 million.
Funding expansion strategy
The funds from the $14 million equity raising will largely go towards accelerating development and distribution of Envirosuite’s water solution to penetrate the much larger market.
Envirosuite also plans to expand its presence in North America, while refining its operational model and increasing its global capabilities.
“With a record third quart of new ARR orders of $2.1 million, the strong customer feedback around the water product, the increasing interest driven by environmental, social and governance (ESG) criteria and the US administration’s US$2 trillion proposed investment into infrastructure, we believe now is the opportunity to further invest in the growth potential for the water product suite, to accelerate our product roadmap and drive growth in the North American market,” Envirosuite chief executive officer Jason Cooper said.
“As part of the offer, we will look to also provide greater balance sheet flexibility as the company continues to grow and invest into transformation initiatives to improve the operating margins of the business,” he added.