Rapid Response Revival announced that it had received $8.9million in commitments from existing shareholders for its $15 million convertible note pre-IPO capital raise. RRR is now opening the raise to the public, with Morgans (the lead broker) presenting it to its clients on Wednesday.
This is RRR’s largest capital raise to date, with the firm looking to strengthen its sales and market position leading into its IPO, planned for June 2025.
RRR has extended the close date for the convertible notes by two weeks to the 19th July 2024.
Pre-IPO Convertible Note
RRR is looking to raise $15 million, with the right to extend it to $25 million with oversubscriptions. The key terms of the notes are:
· Coupon: 10%
· Conversion trigger: IPO or change of control
· Conversion discount 25% / 30% / 35%1
· Conversion valuation cap: $60 million
· Maturity: 31stJuly 2026
Highly attractive valuation cap
The valuation cap of $60 million sets a ceiling price at which the convertible notes are converted into equity, making them a highly attractive investment. The cap is priced at RRR’s raising almost 12 months ago and is well below our $307 - $337 million valuation, reflecting the current challenging capital raising environment.
Depending on the timing and IPO valuation, the pricing cap means that $15 million in notes will likely be worth $22-$28 million, offering a return of 1.5x – 1.8x (assuming a $20 million IPO raise).
An IPO valuation of$250 million (still well below our valuation) values the notes at $64 million, providing a 4.2x return. See Table 2for details.
How to apply
Contact Morgans or RRR directly (members@rapidresponserevival.com.au) for more information on the convertible notes and capital raise.
1 See Table 1.
