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FOS Capital launches $3.7m share placement to fund Aldridge Traffic Systems acquisition

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By Imelda Cotton - 
FOS Capital ASX Aldridge TTI Aldridge Traffic Systems acquisition equity raising
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Lighting solutions specialist FOS Capital (ASX: FOS) has launched a $3.7 million share placement to institutional and sophisticated investors to fund its proposed acquisition of Aldridge Traffic Systems’ street lighting business assets.

Total consideration for the purchase is $3.1m, which includes $900,000 in plant and equipment, $500,000 in inventory and $1.7m in intellectual property.

Australian-based traffic-related products and services provider Traffic Technologies (ASX: TTI), which entered voluntary administration in April, currently owns Aldridge.

Non-core assets

FOS Capital has priced the single-tranche placement of approximately 12.3 million shares at $0.30 per share, a 3.2% discount to the company’s last closing price of $0.31.

The company will also use proceeds from the raising to acquire Traffic Technologies’ other business assets including DeNeefe Signs, Sunny Signs WA, L&M Traffic Services and Quick Turn Circuits.

FOS considers these assets to be non-core and will divest them following completion of the deal, expecting to recoup as much as $1m from the sale, which it will use as additional working capital to restore and expand Aldridge.

Attractive opportunity

FOS managing director Con Scrinis said the Aldridge acquisition was an attractive opportunity that would fast-track the company’s strategic objectives.

These include expanding scale, accessing new markets, generating operating leverage and supporting ongoing government infrastructure spending.

“This transaction will further expand our presence in the Australian lighting solutions market,” Mr Scrinis said.

“Aldridge is an attractively priced asset to which we can add significant value, further building on our track record of six acquisitions since our establishment in 2019.”

Data-enabled lighting

Aldridge Traffic Systems designs, manufactures and distributes a range of data-enabled road lighting.

The company’s products include V-Category streetlights for main roadways and P-Category streetlights for minor roads and pathways.

The company has been a key player in the road lighting industry for over 60 years and its street lighting division generated sales of $6m in financial year 2024.