Daily Brief Australia: Metcash Ltd, Silver Lake Resources, ProTA Therapeutics Pty , EML Payments Limited, Pureprofile Ltd and more

• Metcash Ltd (MTS AU) is looking to raise up to A$300m (US$195m) in its primary placement. The proceeds will be used to partially fund the acquisition of three businesses.
• The deal would be a large one to digest at 22.5 days of three month ADV and 8.4% dilution. 
• In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

• Silver Lake Resources (SLR AU) and Red 5 Ltd (RED AU) will merge. SLR shareholders receive 3.434 RED shares per SLR share, implying A$1.133, a 10.4% discount to the undisturbed price. 
• The merger is strategically sensible as the combined entity should re-rate due to scale, diversification and better cash flow generation.
• The merger terms are more favourable for RED shareholders than SLR shareholders, posing a risk for the vote. The merger may draw out rival suitors.  

• Singapore-based health sciences VC firm SPRIM Global Investments has led the US$21 million funding round (equity and debt) of Australian biotech firm Prota Therapeutics.
• The fresh funding will be used to advance the development of Prota’s peanut allergy remission oral therapy, PRT120, which is being prepared for the phase 3 clinical investigation.
• The new investment will advance the chemistry, manufacturing, and controls (CMC), accelerate the path to an investigational new drug application (IND), and expand Prota’s executive management team to bring on board critical expertise in late-stage drug development and commercialisation.

As part of its strategy to focus on profitable, cash-generative businesses, the boards of EML Payments and PFS Card Services Ireland Limited (PCSIL) have decided to wind down the PCSIL business. This removes a source of considerable cash burn and management distraction and leaves the group better positioned to support the Gifting and the Australian and UK General Purpose Reloadable (GPR) businesses. The strategic review is ongoing and management noted it had received several expressions of interest for Sentenial. FY24 guidance given in November is maintained despite the PCSIL liquidation. We have revised our forecasts to reflect the November trading update and the PCSIL liquidation, upgrading our underlying EBITDA forecasts by 14.9% in FY24 and 6.0% in FY25.

• Pureprofile Ltd (ASX:PPL) is a data analytics, consumer insights and media company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers.
• Pureprofile has reported a 1% increase in Q2 FY24 revenue from continuing businesses and 21% decline in Q2 EBITDA excluding discontinued businesses to $0.9m.
• On a like-for-like basis, EBITDA including cash-based short-term incentives was $1.3m, up 9% on the pcp.