TIDMEQLS
RNS Number : 6988H
Equals Group PLC
28 November 2022
For immediate release 28 November 2022
Equals Group plc
('Equals', the 'Group' or the 'Company')
Acquisition of Open Banking Platform
Equals Group plc (AIM:EQLS), a leading fintech payments group
focused on the SME marketplace, announces that it has entered into
a conditional agreement to acquire the entire issued and to be
issued share capital of Roqqett Limited ('Roqqett'), an open
banking payments platform, for a total consideration of up to
GBP2.25 million (the 'Acquisition'). The Acquisition is conditional
upon regulatory approval from the Financial Conduct Authority
('FCA').
Background
Roqqett is authorised by the FCA as both an AISP (Account
Information Service Provider) and PISP (Payment Initiation Service
Provider), two licences that Equals currently does not hold. These
licences allow Roqqett to perform the full suite of open banking
services, namely, to take payments and access financial data. As
such, Roqqett can disrupt the traditional methodology of consumers
paying merchants, both in person and online, via debit and credit
cards.
Established in November 2019 by Glenn Smith, who previously held
senior roles with UBS and Barclays in FX Derivatives followed by
over a decade in technology start-ups, the Roqqett team leveraged
its significant experience across finance, payments, and disruptive
technologies to develop the platform.
Strategic Rationale
Roqqett has a proprietary platform, utilising its regulatory
licences, that builds on existing payment systems coupled with
state-of-the-art APIs with next generation security. Businesses
that receive payments will benefit from Roqqett's platform through
a cheaper and quicker method of payment, while consumers benefit
from enhanced security, which results in no card details being
shared and the use of established biometric approvals already
installed on their mobile devices.
In addition to the AISP and PISP licences, the benefits for
Equals of this technology fall into three major categories:
-- Roqqett enables Equals to take part in the full payment
lifecycle for its Corporate and Enterprise customers by adding the
B2B2B/C leg to the ultimate consumer. Direct account to account
payments via Roqqett offers an alternative to debit cards, credit
cards and traditional push payments, giving Equals B2B customers
immediate access to funds sent by their B2C or B2B customers with a
smoother consumer experience. Having this capability will widen the
use-cases and addressable markets for both Equals Money and Equals
Solutions.
-- The Equals infrastructure, incorporating the own-name IBAN
capabilities and direct connection to Faster Payments, will
significantly enhance the Roqqett proposition on a stand-alone
basis. The platform can be sold to merchants as a complete
end-to-end solution encompassing the ability to process refunds
automatically, a service not typically provided by 'standard' open
banking integrations with third party bank accounts.
-- The data capabilities of the technology will allow Equals to
make machine-learning-informed, rapid decisions on risk-management
for B2B customers who are on the platform. Equals will have
complete transparency of the customer activity and as such can
assess suitability for forward contracts and perform enhanced
transaction monitoring.
Consideration Overview
The Acquisition consideration will be satisfied by an initial
GBP1.0 million cash payment (reduced by the amount of the gross
liabilities of Roqqett) followed by three deferred payments one of
up to GBP0.25 million satisfied in cash (when Roqqett receives the
benefit of R&D tax credits) and two of GBP0.5 million, one in
cash and the other satisfied by the issue of ordinary shares in
Equals, struck at the five-day volume-weighted average price of
87.23p as of Friday, 25 November 2022. The second and third
deferred payments become due when certain capabilities are added to
the platform and are expected to be paid in under one year. The
initial consideration will be funded from Equals' existing cash
resources and the Acquisition is expected to be earnings accretive
for the Group in the medium term.
For the year ended 31 December 2021, Roqqett had a loss before
tax of GBP0.57 million and had assets of GBP0.2 million.
Glenn Smith, CEO of Roqqett, said: "Roqqett has developed a
unique checkout experience for the rapidly growing market in open
banking payments. This offering is enhanced with the addition of
Equal's capabilities in IBANs and their membership of the Faster
Payments Scheme. The team at Roqqett is looking forward to working
with Equals to maximise the potential for both platforms arising
from this Acquisition."
Commenting on the Acquisition, Ian Strafford-Taylor, CEO of
Equals, said: "We are delighted to announce the acquisition of
Roqqett and its cutting edge open-banking payment platform and
welcome Glenn and his team to the Equals Group. Similar to the
Equals Connect transaction announced in October, the transaction is
made possible by the continued strong performance of the Group and
our surplus cash balances.
"The platform, underlying technology, and licences that we are
acquiring fit well with our stated strategy of providing payments
solutions to our B2B customer base. The ability to provide our
corporate customers with an alternative route to acquire payments
from their B2B or B2C customers is the last piece of the jigsaw in
terms of Equals participation in the full payment lifecycle. This
Acquisition allows us to fast-track this capability which in turn
will widen our addressable markets for our services and ultimately
drive growth."
This announcement contains inside information.
- Ends -
For more information, please contact:
Equals Group plc
Ian Strafford-Taylor, CEO Tel: +44 (0) 20 7778
Richard Cooper, CFO 9308
www.equalsplc.com
Canaccord Genuity (Nominated Advisor
/ Broker)
Max Hartley / Harry Rees Tel: +44 (0) 20 7523
8150
Buchanan (Financial Communications)
Henry Harrison-Topham / Toto Berger Tel: +44 (0) 20 7466
equals@buchanan.uk.com 5000
www.buchanan.uk.com
Notes to Editors:
Equals Group is a technology-led international payments group
augmented by highly personalised service for the payment needs of
SME's whether these be FX, card payments or via Faster Payments.
Founded in 2007, the Group listed on AIM in 2014 and currently
employs around 285 staff across sites in London and Chester. For
more information, please visit www.equalsplc.com .
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