TIDMEQLS
RNS Number : 1313C
Equals Group PLC
15 October 2020
15 October 2020
Equals Group plc
('Equals' or the 'Group')
Acquisition of international payments business from Effective
FX
Further B2B growth initiatives
Equals (AIM:EQLS) , the fast-growing B2B focused international
payments and e-banking group, announces that as part of its
continued growth strategy focusing on the B2B segment, the Group
has acquired the assets from the international payments business of
Effective FX Limited ("Effective FX" or "EFX"), a company that has
been wholly owned by Amir Mehrad, the CEO of Effective FX, since
its incorporation in 2012. The international payments business of
Effective FX consists of upwards of 200 corporate clients from a
wide range of industries.
As part of the acquisition, Amir Mehrad will join Equals to
further develop its B2B sales process, utilising his experience and
industry relationships. Extensive due diligence has been performed
on the customer base of Effective FX and its business, in common
with previous acquisitions, and is expected to be integrated into
the Group seamlessly.
The acquisition comprises the purchase of EFX's client book (the
"Book") and consideration for this acquisition is instalment based,
against a targeted revenue of GBP2.6 million over three years. The
first instalment of GBP125,000 is payable 14 days after completion.
There are three more instalments of GBP125,000 at six months, nine
months and twelve months after completion. Subsequently, there are
eight further instalments, subject to revenue hurdles, bringing the
total purchase price to GBP1,575,000. All consideration payable is
to be satisfied from Equals' existing cash resources.
For the twelve-month period to 31 August 2020, the EFX Book
generated unaudited adjusted EBITDA of approximately GBP0.5 million
and EFX had total assets of approximately GBP0.5 million, with net
assets of approximately GBP0.03 million as at the same date.
The acquisition shows the continuing growth of the Group in B2B
international payments via its three routes to market: firstly,
directly to its own customers; secondly, via its Equals connect
B2B2B strategy; and thirdly, via the acquisition of compatible
businesses. Equals is increasingly being approached by other
international payments businesses and will continue to selectively
acquire if these companies meet the Group's investment criteria and
have accretive customer profiles.
Further B2B growth initiatives
Concurrently with this acquisition, the Equals Connect business
is growing strongly through the strength of its proposition and
taking advantage of issues at competitors. Equals Connect has added
12 new white-label partners in 2020 to date, bringing the total to
25, with more in the pipeline. Turnover through the platform has
increased 64% in the same period and is set to grow further as new
clients increase activity. The Group sees this platform as a key
aspect of its growth strategy for 2020 and beyond.
In addition to the acquisition of the Book and the success of
the Equals Connect platform, the Group continues to focus on
increasing its B2B customer acquisition. Strategically, the Group
has built new products, connectivity and infrastructure in recent
years and can now deploy more resources to selling those products
to more customers. Accordingly, Equals has continued to advance its
B2B growth strategy by a roll-out in December of a new CRM system
which will yield improved client acquisition and increased revenues
from existing customers. Concurrently, a new sales commission
structure has been implemented to incentivise more new customer
acquisition, the B2B focussed Equals Money website is now live and
a B2B-dedicated digital/social marketing strategy to support this
and drive traffic has also gone live. These steps form part of an
overall wider growth strategy which will be outlined in the coming
months.
Ian Strafford-Taylor, Chief Executive Officer of Equals, said:
"This acquisition highlights a number of key strengths of Equals in
the B2B international payments arena. Firstly, we remain open to
M&A opportunities and can structure deals to suit both parties
whilst concurrently protecting our cash position. Secondly, it
demonstrates the multiple ways we can acquire volumes and revenues,
directly via sales and marketing, indirectly via our outstanding
Equals Connect B2B2B model, and lastly via acquisition. Thirdly,
the excellence of our payments infrastructure and technology means
that Equals is a business that attracts talented operators such as
Amir who clearly identify the significant benefits of having a much
broader range of products to sell. I am delighted with this
acquisition as well as having Amir as part of our team going
forwards."
- Ends -
This announcement contains inside information.
For more information, please contact:
Equals Group plc
Ian Strafford-Taylor, CEO Tel: +44 (0) 20 7778
Richard Cooper, CFO 9308
www.equalsplc.com
Cenkos Securities plc (Nominated Advisor
/ Joint Broker)
Max Hartley / Callum Davidson Tel: +44 (0) 20 7397
Nick Searle (Sales) 8900
Canaccord Genuity (Joint Broker)
Bobbie Hilliam / David Tyrell Tel: +44 (0) 20 7523
Alex Aylen (Sales) 8150
Buchanan (Financial Communications)
Henry Harrison-Topham / Steph Watson Tel: +44 (0) 20 7466
/ Toto Berger 5000
equals@buchanan.uk.com www.buchanan.uk.com
Notes to Editors:
Equals is a leading challenger brand in payments that
disintermediates the incumbent banks with a superior user
experience and low-cost operating model. The Group enables its
business and personal customers to make easy, low-cost payments
both domestically and in a broad range of currencies across a range
of products all via one integrated system.
Equals provides money movement services to both business and
personal customers through five inter-connected channels -
International Payments, Corporate Expenses platform, Current
Accounts and Travel Money (comprising currency cards and physical
currency). International Payments channel supports wire transfer
foreign exchange transactions direct to bank accounts. For
corporates, Equals has a market-leading business-expenses solution
based around its corporate platform and prepaid card which yields
significant cost savings via tighter control on expenses before
they are incurred coupled with eliminating inefficient processes.
Equals also offers business and retail bank accounts with all the
functionality offered by banks, namely faster payments, BACs,
direct debits, international payments and a debit card. The Travel
Money offerings (retail currency card and physical currency)
represent cost-effective and secure methods for travelers to spend
abroad.
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