The Eroad Ltd (ASX: ERD) share price is jittery today after the company announced the completion of its share purchase plan.
The company's NZ$16.1 million share purchase plan has closed oversubscribed.
Earlier this morning, the Eroad share price rose 0.67% to $6.00. However, at the time of writing, the shares are swapping hands for $5.93, a fall of 0.5% on the previous closing price.
Let's take a closer look at today's news from the transport technology company.
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Oversubscribed share purchase plan
The Eroad share price is wobbling after it received applications for NZ$43 million worth of shares for its NZ$16.1 million share purchase plan.
Under the plan, eligible shareholders were offered up to $30,000 worth of new shares for $5.30 apiece. As a result, the company has decided to accept oversubscriptions of NZ$3.9 million to round out the share purchase plan at NZ$20 million.
The share purchase plan is part of a capital raise helping fund the company's acquisition of Coretex Limited. Eroad will be paying NZ$157.7 million for the telematics vertical specialist provider.
Eroad already raised NZ$64.4 million in the first part of its capital raise. The first stage of the capital raise happened in July. It offered shares for $5.25 apiece – a 9.2% discount on the shares' previous closing price.
The Eroad share price gained 6.6% on the back of news of the acquisition and capital raise.
It's expected the acquisition will be finalised in the second half of the 2022 financial year.
Commentary from management
Eroad's chair Graham Stuart commented on the news driving the company's share price today:
We are delighted with the support we have received from shareholders since we announced the acquisition of Coretex. We have seen strong support through the many conversations we have had with shareholders, the 100% shareholder vote in favour of the transaction and the oversubscribed placement and share purchase plan.
Eroad share price snapshot
It's been a good year for the Eroad share price. It has gained 26% since the start of 2021. It has also increased by 49% since this time last year.
The company has a market capitalisation of around $556 million, with approximately 81 million shares outstanding.
