Strategic investor injects growth capital
​On February 3, 2017 PA Power Automation AG (ISIN DE0006924400, Entry Standard, PPA GR) announced a capital increase without subscription rights, at a price well above the average share price for the preceding trading days. This paves the way for a number of key steps: 1) the net proceeds of approx. €3.3 million can be used to invest in growth; 2) the investor (Techmation) is also a business partner, especially in Asia, offering a complementary product portfolio; 3) the two companies have signed an Investment Agreement to drive forward sales of the PA9000 in Asia. In addition, there are plans to develop a joint control module for the Asian market. Although all three factors should strengthen PA's growth in the medium term, we are not altering our estimates at present. We have merely factored in the direct impact of the capital increase into our model. We confirm our price target of €2.45 and reiterate our Hold rating.
PA Power Automation AG. PA Power Automation AG is a Germany-based developer, manufacturer and marketer of personal computer (PC)-based computer numerically controlled (CNC) software and systems. Its customers are mainly manufacturers of machine tools for waterjet cutting, laser cutting and plasma and oxy-fuel cutting. The Company's product portfolio comprises the PA 9000 series and the PA 8000 series, as well as related Input/Output (I/O) modules, panels, and software tools. The Company operates through its development and production subsidiary Power Automation GmbH and the distribution companies Power Automation France Sarl, Power Automation America Inc, and the joint venture Han's PA Automation Technology Co Ltd.
Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM's services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.
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