The AMA Group Ltd (ASX: AMA) share price is one to watch after the Aussie automotive aftercare and accessories group completes its latest equity raising.
What are the terms of the AMA offer?
AMA is seeking to raise $138.6 million in a 1-for-4.5 entitlement offer, in addition to its $77.1 million institutional placement.
The Retail Offer Price of $1.15 per share represents a 5.3% discount to the company's $1.215 valuation on 27 September prior to the equity raising.
AMA shares will open at $1.31 per share this morning having climbed more than 50% higher since the start of the year.
Why is AMA raising millions?
On 1 October, AMA announced it would acquire 90% of the shares in the Suncorp Group Ltd (ASX: SUN) subsidiary, Smart Repairs Australia Pty Ltd, and 100% of ACM Parts Pty Ltd.
These two acquisitions cost $420 million and $20 million, respectively, which AMA plans to partially fund via its $215.6 million equity raising.
Is AMA a strong ASX performer?
Long-term shareholders have picked up some outstanding capital gains in recent years as AMA shares have soared higher.
Over the last 5 years, the AMA share price has climbed 309.38% higher from just $0.32 per share on the back of consistent earnings growth.
This growth is before we even consider the 2.08% per annum dividend yield on offer from the company's shares at the moment.
AMA believes its recent transactions will be a strong strategic fit, while also strengthening its existing relationship with Suncorp.
If management can deliver on its expected $17.0 million in synergies from the purchases, AMA shares could be soaring even higher in 2020.
Foolish takeaway
The AMA share price has been a strong performer within the ASX 300 in recent years and this could continue into 2020.
With a solid 2% per annum dividend and more than 300% growth in the last 5 years, AMA shares could be hot property in the coming decade.
