Security company Wynyard was operating in two of the hottest technology spaces of security and big data and had already moved to a strategy of increasing its focus on the United States, Forsyth Barr broker Andrew Rooney said.
The company was targeting large enforcement agencies. Additional capital was required to continue the strategy.
Raising an additional $45million would support its growing sales and service team and expanded operations in the Middle East and Americas.
Extra funding would also support development of new product features, he said.
The placement of $40 million had been underwritten at $1.79 a share (about 22 million shares).
A share purchase plan would be available for shareholders on the register from June 23 with the aim of raising an additional $5 million (2.8 million shares).
Mr Rooney said Forsyth Barr had forecast net proceeds of $42.75 million after costs with the total number of shares in Wynyard increasing from 117 million to 142 million.
Wynyard had made a strategic decision to move its focus to target large US-based customers.
''As both we and the com-pany have highlighted, these customers represent larger contracts - in the $1 million to $10million initial con-tract range - but typically have longer sales and reve-nue collection cycles. These revenues are lumpy and difficult to predict.''
The company wanted to expand its operations in the Americas, which were new markets, and the existing Middle East markets, he said.
It had forecast total staff numbers would increase from 228 at the end of 2014 to 280-300 by the end of the 2015 financial year.
The additional staff would support its product development objectives and boost sales and support staff numbers from 67 to 117 full-time employees.
The additional capital raised would be used to fund the growth.
However, Wynyard must prove it could convert the time and staff it had invested in the US into meaningful contacts, Mr Rooney said.
Wynyard had confirmed it had reached an agreement with a new distribution partner that had existing relationships with most of the small to medium-size law enforcement agencies in the US.
The company had been developing the relationships for some time. Once again, the key for Wynyard was being able to gain additional revenue from the relationships.
After Wynyard provided 2015 financial year operating earnings and capital expenditure guidance to complement its existing revenue guidance of $40 million to $45 million, Forsyth Barr revised its operating earnings down from a loss of $5million to a loss of $12 million.
The target price remained at $2.20 a share, Mr Rooney said.
At a glance
Security company Wynyard Group wants to raise an additional $45 million of capital to support its revenue growth aspirations.
This follows a successful $35 million capital raising in March last year.
Wynyard is targeting large customer contracts but these are lumpy with longer collection cycles.
A successful capital raising will cover the company's funding requirements into 2017.
