U.K.-based online payment services provider FairFX Group Plc on Aug. 8 announced its proposed acquisition of CardOne for a consideration of £15.0 million, as well as a fundraising of up to approximately £26.0 million through a conditional placing and open offer.
FairFX said it will launch a conditional placing of 46,034,485 new ordinary shares at 58 pence apiece to raise about £25.0 million, net of fees and expenses. A further 1,730,669 open offer shares at the same price will be provided to all qualifying shareholders to raise up to around £1.0 million, before fees and expenses, on the basis of 1 open share offer for every 60 existing ordinary shares.
Approximately £12.8 million of the proceeds from the fundraising will be used to fund FairFX's acquisition of CardOne, which is also based in the U.K.
FairFX said that application will be made to the London Stock Exchange for the new ordinary shares to be admitted to trading on the AIM market, and dealings are expected to commence Aug. 25.
CardOne is an independent firm, authorized by the U.K. Financial Conduct Authority, that provides current accounts and a digital banking platform. The firm's net profit stood at £600,000 for the first half, and its gross assets amounted to about £1.9 million as of March 31.
According to FairFX, the acquisition will "fast-track" its push into offering digital banking services to the small and medium-sized enterprise space to complement its current corporate expense management platform. The company also expects the acquisition to enhance its earnings in the first full year after completion, with cost savings and synergies estimated at £3.5 million over three years.
FairFX noted that CardOne's brand and its existing management are expected to be retained.
The acquisition and placing are subject to shareholder approval at an Aug. 24 general meeting.