Institutional investors Pie Funds and Milford Asset Management are putting up $2 million for a stake in scented candle and beauty products maker Ecoya.
The investors are paying 90 cents a share for some 2.2 million units in a new share issue at a discount of 3.2 per cent to the current price of 93 cents. That works out at about 3.6 per cent of Ecoya once the allotment is made. Pie Funds, a Takapuna-based fund manager, will buy about 1.89 million shares, or 3.1 per cent of the company, while Milford will take some 333,000 shares, or 0.5 per cent.
"We think the company has a bright future with a lot of upside potential," Pie Funds managing director Mike Taylor said in a statement. "We like to invest in small companies that have the ability to grow revenue and profits significantly."
The investment comes after Ecoya said it beat forecast annual sales by 10 per cent, with some $22 million in revenue, and it had previously indicated it should be profitable this financial year.
Pie Funds invests in small companies listed on the ASX and NZX, with its Australasian Growth Fund reporting a 116 per cent return since inception in December 2007 and its Australasian Dividend Fund making a 13 per cent return since it started in September last year, according to its website. Its other investments included NZX-listed Diligent Board Member Services and Skellerup.
Ecoya chairman and chief executive Geoff Ross said the funds will initially be used to reduce debt.
"Whilst we are happy with Ecoya's capital structure and current level of debt funding, we thought it useful to have Pie Funds on our register," Ross said.
Pie Funds and Milford join a stock register including Ross and the Business Bakery, who drove the global roll-out of vodka brand 42Below, outgoing Air New Zealand chief executive Rob Fyfe, Trade Me founder Sam Morgan, Max clothing chain founder David Wright, American entertainment veteran Rich Frank, and Trilogy founders Catherine de Groot and Sarah Gibbs.