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An investment by two US-based investors in NZX-listed vending technology company VTL Group is a vote of confidence and will underpin plans for international expansion, the company says.
John Halpern and George Denny III are paying about $10.6 million to purchase a 9.95 per cent stake each in VTL.
The two men founded Boston-based investment company Halpern, Denny & Co, which owns a stake in Service America Group (formerly All Seasons Holdings) - a company in which VTL in turn is planning to take a majority shareholding.
VTL chairman Gary Stevens said the cash would strengthen the balance sheet, underpinning expansion plans in the US, Europe and Australia.
"There are things that we can do with that sort of money that will just make it a bit easier for us going forward," Stevens said.
VTL was still on track to exercise a pre-paid option to acquire a majority shareholding in Service America in the present financial year.
"Exercising this pre-paid option will see Service America's results consolidated into ours, lifting our annual revenue from last year's $48.5 million to almost $300 million."
Last month VTL agreed to buy the vending assets of US company Nor-Cal Beverages for $4.4 million. VTL plans to convert these assets into more than 20 franchise routes, which have been selling for $US254,000 ($369,000) each.
"We are now seeing an increased market awareness of the value of our leading-edge technology and how it transforms the economics of traditional vending businesses," Stevens said.
The company was also planning to make more acquisitions in the future.
"We are constantly looking to increase the size and scope of our business," the chairman said.
The investment was a vote of confidence from two experienced investment bankers.
"For those two people to look at what we're doing and say, 'These guys have got a good thing going', we're very excited ...
"They've basically put their money in to support [that] view."
The deal needs shareholder approval and would see VTL sell more than 1 million shares from its treasury stock and issue 6.27 million new shares at about $1.45 each.
VTL's shares closed up 16c yesterday at $1.31.
