Brady PLC (LON:BRY) has signed a loan agreement with investment house Hanover, providing it with £1.25mln immediately to boost its working capital.
The risk management software firm said that on top of the £1.25mln, it will also be able to request another £2.75mln provided an £8.3mln cash offer for the firm by Hanover, announced in mid-October, is accepted by shareholders.
READ: Brady advances funding initiatives to support working capital requirements
The initial funds will be used to support Brady’s working capital requirements until 15 November, the first closing date for Hanover’s offer, as well as helping to refinance its £1mln overdraft facility.
Hanover’s offer of 10p per share was at a 51% premium to Brady’s close price the session before the bid was announced.
Hanover’s founding partner, Matthew Peacock, said the take-private deal will help Brady “drive growth and deliver best in class products and services”.
In lunchtime trading on Monday, Brady's shares were 12.5% lower at 10.5p.