Dicker to raise $40 million

Publicly listed Dicker Data has announced the offering of corporate bonds to raise $40 million for reduction of debt and general expenditure.

In a statement to the ASX, the distributor said that "it will undertake a 5 year floating rate unsecured corporate bond offering to raise $40 million" and the money "will be used to reduce existing bank debt and for general corporate purposes".

Chairman and chief executive David Dicker told CRN the company chose to raise funds via bonds rather than shares because "issuing shares dilutes equity".

David Dicker and his ex-wife, director Fiona Brown, hold almost 90 percent of the shares in the distie.

The bank debt that will be reduced is "$7 million lent against our factory in Kurnell", Dicker said. "Clearing that allows us to release that security for other possible uses."

"This bond issue is an important initiative for our company which reflects our determination to ensure that we have multiple sources of funding and the security of longer term debt."

The bonds will be only available to "professional and sophisticated investors" as defined by the Corporations Act. No prospectus or disclosure documents will be lodged with ASIC in relation to the offer, and the bonds are unrated by any agency.

“We look forward to establishing relationships through the bond issue with many new investors who will have a stake in the ongoing success of our company," said Dicker.

Dicker Data went public in January 2011. The half-year to 31 December saw the distie more than double its revenue – courtesy of its acquisition of Express Data – almost reaching the half-billion mark. The company reaped $2.3 million of net profit on the back of those sales.

The distie has also reduced its head count by more than 100 in the past half-year, in an effort to return to the days of $4 million revenue per employee.