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Tuesday, 13 November 2012
DealNet Capital closes non-brokered financing, raises $625,000
DealNet Capital Corp. (CNSX: DLS) (OTC PINK: GAIMF) has closed a non-brokered private placement financing for $625,000 in proceeds.
The financing consisted of 12.5 million shares at a price of 5 cents each. The total amount raised is higher than the $500,000 initially planned when it announced its intention in May.
“We are very pleased to have this key capital raise completed as it has allowed management to prepare the company for significant growth in fiscal 2013,” said chairman and CEO, Graham Simmonds.
“The fact that we were able to exceed our initial raise target is a clear indication of the confidence that investors have placed in our business plan and our management team."
The new funds will be used to move forward with the growth plans for OC Communications Group, DealNet's recently acquired business process outsourcing (BPO) subsidiary. The money will also be used to launch One Dealer, its strategy to provide customer support and financing services into the heating, ventilation and air conditioning industry.
Ubika Research started coverage on Dealnet recently, saying the merchant banking company, with investments in a diverse group of businesses, is "highly discounted with substantial upside potential."
DealNet Capital, which was previously a company called GameCorp, restructures its investee firms through management, administration, early funding and other types of support. It pulls together cash resources from the realization of previous investments, third-party debt, related party loans and private placements.
The company continues to rebrand and restructure its business from the gaming industry to heating ventilation and air conditioning (HVAC) financing and services, water heater rentals and the business process outsourcing (BPO) business.
Ubika analyst Vikas Ranjan notes Dealnet's strategic execution of its business plan.
The business model of the company includes the establishment of a BPO segment for "sustainable and predictable revenue generation", which will then be leveraged to enter the North American HVAC financing and servicing market, as well as the water heater rental business.
"The company has successfully established its BPO segment and is currently building capabilities in HVAC financing and servicing," Ranjan says in his note.
In executing its business plan, in May of this year, Dealnet acquired OC Communications Group, a BPO, and integrated it under the brand OCCGI.
The analyst notes that OCCGI is an "established player in the BPO industry, generating robust, recurring and predictable profits."
He adds that the BPO segment will also provide a "concrete base" for the company to establish its One Dealer business in the North American HVAC and water heater financing industry, by providing customer care services and automation technology.
The company, through One Dealer, plans to bring together more than 80,000 small and intermediate-sized dealers in the North American HVAC and water heater rental industry under one umbrella.
One Dealer is expected to help these dealers reach out to end customers through OCCGI, and at the same time "authorize and encourage them to sell Dealnet's finance products and services." The company plans to position itself between the dealers and the end customers, earning profit from both.
In September, DealNet also announced the planned acquisition of an Atlanta-based home services company. It said it continues to do its due diligence on the acquisition target, with both parties working together to close the deal.