ThinkSmart Limited Disposal of Shares in ClearPay Finance Limited (6221Y)
23 August 2018 - 4:00PM
UK Regulatory
TIDMTSL
RNS Number : 6221Y
ThinkSmart Limited
23 August 2018
23 August 2018
ThinkSmart Limited
("ThinkSmart" or the "Company" or, together with its
subsidiaries, the "Group")
Disposal of Shares in ClearPay Finance Limited ("ClearPay")
ThinkSmart Limited (AIM: TSL), a leading digital payment
solutions provider, announces that it has sold 90% of the share
capital of ClearPay to AfterPay Touch Group Limited ("AfterPay"), a
company listed on the ASX.
ClearPay, a company which commenced trading in July 2017 and
formally launched in March 2018, allows retailers to offer their
customers the ability at the point of sale to make purchases of up
to GBP450 and spread the cost over three interest-free monthly
payments.
The Company's subsidiary, ThinkSmart Europe Limited ("TSE"), has
sold 90% of the issued shares in ClearPay to AfterPay for 1,000,000
shares in the capital of AfterPay (currently valued at AUD $18.55m)
("Consideration Shares") to be issued to TSE. An initial tranche of
750,000 shares will be issued to TSE at completion on 23 August
2018 (am AEST) and a second tranche of 250,000 shares will be
issued to TSE on 23 February 2019, being 6 months from
completion.
AfterPay are acquiring the ClearPay corporate entity, including
ClearPay's contracts with relevant service providers and key
employees with local knowledge of the UK market and regulatory
landscape. ClearPay's existing retailers and customers currently
transacting on ClearPay's system will be afforded the opportunity
to transition onto AfterPay's global platform upon launch, expected
to be within the next 6 months.
Utilising the local capabilities of the ClearPay entity and
team, Afterpay will prepare to launch its globally scalable system
into the UK within the next 6 months and will immediately engage
with relevant retailers with a local UK presence.
The Company's subsidiary, RentSmart Limited has entered into a
business separation and transitional services agreement with
ClearPay to support the transaction and facilitate the transition
to AfterPay.
A proportion of the 10% shareholding in ClearPay retained by TSE
will be made available to employees of ClearPay under an employee
share ownership plan ("ESOP"). After completion, TSE will make
available some of the shares in ClearPay held by it for the grant
of options under the ESOP (up to 3.5% of the total share capital of
ClearPay). Any such options will only be exercisable on an ultimate
exit event or at such time as TSE no longer holds shares in
ClearPay.
TSE also has rights of pre-emption to subscribe for shares in
ClearPay in any follow on fundraise. Afterpay has an option to
acquire the remaining shares held by TSE (and any shares forming
part of the ESOP), exercisable any time after 5 years from
Completion based on agreed valuation principles. If the option to
purchase is not exercised by AfterPay within 5 years and 6 months
from Completion then TSE may exercise a put option to sell the
remaining shares in ClearPay held by it (and any shares forming
part of the ESOP) to AfterPay at a price calculated on agreed
valuation principles.
The Company is also a party to the sale and purchase agreement
and is guaranteeing the obligations of TSE under that agreement.
For the 12 month period to 30 June 2018 ClearPay incurred unaudited
losses of GBP0.6m and at 30 June 2018 had unaudited balance sheet
net assets of GBP1.4m (excluding inter-company debt).
As part of the transaction AfterPay will ensure that the
Consideration Shares are listed on the ASX. It is TSE's current
intention to dispose of the initial tranche of Consideration Shares
over the medium term in an orderly manner whilst retaining an
ongoing investment in AfterPay. It is expected that shareholders
will be rewarded in the form of a special dividend and capital
return whilst the business will ensure that it retains sufficient
cash reserves for further expansion and product development
opportunities.
The business intends to advise shareholders at their full year
results in mid-September of the detail of the return.
The Group will continue to operate its existing core credit and
leasing business, and to invest in its proprietary leading digital
payments solution SmartCheck.
Commenting, Ned Montarello, ThinkSmart's Executive Chairman,
said: "The Board is pleased to crystallize a significant return on
investment for shareholders with the sale of 90% of ClearPay, while
still retaining an ongoing investment in what, in our view is the
leading player in this sector globally, having recently
successfully entered the US market.
AfterPay's product, ongoing success and go to market strategy is
compelling and we are delighted to now be a part of this story.
In a market three times the size of Australia the acquisition of
ClearPay will assist AfterPay in becoming the dominant player in
the UK market with the potential for significant growth over the
next five years."
For further information contact:
ThinkSmart Limited Via Instinctif Partners
Ned Montarello
finnCap Ltd (Nominated Adviser and Joint Broker) +44 (0)20 7220 0500
Jonny Franklin-Adams, Emily Watts, Anthony Adams (Corporate Finance)
Tim Redfern, Richard Chambers (Corporate Broking)
Canaccord Genuity (Joint Broker) +44 (0)20 7523 8350
Sunil Duggal
David Tyrrell
Margarita Mitropoulou
Instinctif Partners (UK) +44 (0)20 7457 2020
Giles Stewart
Rui Videira
Honner (Australia)
Michael Mullane +61 (0)414 590 296
About ThinkSmart Limited
ThinkSmart Limited is a leading digital payments company and
provider of point of sale retail finance for both consumers and
businesses. ThinkSmart's solutions are underpinned by its
innovative and scalable proprietary technology platform,
'SmartCheck'. Since it commenced operations in the UK in 2003, the
Group has processed in excess of 350,000 individual
applications.
ThinkSmart's offering provides easily integrated digital payment
solutions for retailers such as the 'Flexible Leasing' proposition
distributed in partnership with Carphone Warehouse.
Its technology is proven to deliver new innovative solutions
aimed at high volume low value transactions.
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END
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