Aussies planning to drop into Queenstown

Skydive Queenstown, operating as Nzone, has roughly a third of the New Zealand tandem skydiving market.

Australian Tandem skydive operator Skydive The Beach is plunging into New Zealand with the acquisition of Skydive Queenstown for $18.6 million.

It is the first overseas foray for the Australian company, which opened in Wollongong, south of Sydney, in 1999 and now operates 16 "drop zones" in New South Wales, Queensland, Victoria and Western Australia.

Skydive Queenstown, which operates as Nzone, holds roughly a third of the New Zealand tandem skydiving market.

It is the only player in Queenstown, the Southern Hemisphere's biggest adventure tourism destination.

In the 2015 financial year, the company conducted 23,055 tandem skydives, generating revenues of $11.4 million.

It also operates an aircraft fleet, including 2 Cessna Grand Caravans.

"SQ is a strong strategic fit for SKB, and the acquisition delivers on three of SKB's four strategic priorities: acquisitions, diversification and efficiencies," Skydive The Beach said on Monday.

The Australian company, which listed in March, is raising $21.4 million through a share offer to investors to fund the acquisition.

Skydive is offering two new shares for every nine held, at an issue price of A30c each.

The company was expecting to raise $20.1 million from institutional investors yesterday, and a further $1.3 million through a retail entitlement offer that opens on October 19.

Skydive The Beach said funds raised from the entitlement offer would be used to acquire the New Zealand company and also two additional aircraft to enhance capacity at two existing Australian drop zones.

Skydive The Beach, which raised its earnings forecast for 2016 this month, said the new acquisition would boost its numbers further.

The company now expects fiscal 2016 revenue of $60 million, up from $52 million.

Underlying earnings are now put at $14.7 million, compared with $12.6 million previously.

Shares in the skydive operator were put in a trading halt yesterday before the announcement.

The stock closed on Friday at A31.5c a share.