Wavenet receives $1.2m funding injection

Perth-based wireless hardware provider Wavenet has secured $1.2 million in funding to aid its expansion plans.

The ASX-listed company received the funding via an issue of 7,736,680 shares to UK investment group Obelisk Nominees.

Wavenet CEO Richard Timms said the funding would boost R&D spending and prime the company for the acquisition of a local or US-based wireless player.

“In the current M&A (mergers and acquisitions) environment, cash is king,” Timms said.

About 20 companies within Australia and a number of US players were currently under consideration, he said. However, a local player with a complementary customer base and diversified product and skill set was preferred.

If acquired, a US-based company would allow for the setting up of a local office and staff, Timms said. Currently the company had no direct representation in that country.

Timms would be drawn on when Wavenet expected to finalise an acquisition but suggested it could be some time, saying that the asking prices of many local prospects were too high to return value to company shareholders.

He said he hoped for further consolidation in the wireless hardware sector but added that he was not aware whether Wavenet itself was currently an acquisition target or not.

Wavenet provides industrial-grade wireless hardware such as automatic meter- and point of sale- readers to the US market and a range of additional value-added services to the Australian market.

Timms said the current $1.2 million cheque was the second funding injection since Wavenet floated in 2000. Eighteen months ago the company embarked on a $5 million capital raising program to allow for up-front payment to large scale tier-1 manufacturing partners.

Last week the company released a statement on its quarterly cash flow index. For the quarter to 30 June Wavenet had a cash balance of $6.989 million.

As at 1pm EST today the company was trading at $0.175