Trustbuddy has entered into an agreement to acquire Italian Prestiamoci, a long-term Peer-to-Peer (P2P) lender, for a total of EUR 5.3 million in order to strengthen its offering of business loans to small and medium-sized enterprises and consumer credit in most European countries.
Furthermore TrustBuddy has agreed to acquire Dutch Geldvoorelkaar for a consideration of EUR10.6m. The consideration comprises EUR 3 million cash, EUR 4 million through the issue of new shares at a 20% premium to the pre-announcement share price and a EUR 3.6 million vendor loan of which 50% is redeemed in January 2016 and 50% redeemed in January 2017. Shares issued as part of the consideration will be subject to lock-up restrictions which expire in January 2016 in respect of 50% of the shares and January 2017 for the remainder.
Both acquisitions remain subject to the satisfaction of certain conditions. In particular, the acquisition of Prestiamoci is conditional upon Prestiamoci receiving a payment services, PSD, license. The Company is currently considering various financing options, including a potential equity fundraising, to part finance the acquisitions.
Geldvoorelkaar (see earlier coverage)
Geldvoorelkaar is the first P2P lending platform with a credit licence issued by the Dutch Financial uthority (AFM). Geldvoorelkaar offers a professional and established alternative source of financing for SMEs.
- Geldvoorelkaar opens up European SME market opportunities to TrustBuddy. Management believes there to be substantial demand for alternative lending sources in the Nordic market in particular in P2P lending in the Netherlands.
- Geldvoorelkaar has been fully operational since 2012 and has a c60-65% estimated market share.
- Year to date, Geldovoorelkaar has funded EUR 20 million of SME loans with an average revenue margin approaching 6% with no active marketing.
- Geldvoorelkaar is a strong SME platform with EUR 1.6 million expected revenue for 2014 and growth in the Netherlands expected at an average of 80% in the following two years.*
- Geldvoorelkaar is already profitable with an expected earnings before interest and tax for 2014 of EUR 0.7 million
- Subject to the satisfaction of certain conditions, TrustBuddy has agreed to acquire Geldvoorelkaar for a consideration of EUR10.6m. The consideration comprises EUR 3 million cash, EUR 4 million through the issue of new shares at a 20% premium to the pre-announcement share price and a EUR 3.6 million vendor loan of which 50% is redeemed in January 2016 and 50% redeemed in January 2017. Shares issued as part of the consideration will be subject to lock-up restrictions which expire in January 2016 in respect of 50% of the shares and January 2017 for the remainder.
Prestiamoci (see earlier coverage)
Prestiamoci is an Italian private P2P lending company focussing on long term consumer loans.
- Prestiamoci has established a licenced P2P platform in the highly regulated Italian market. The acquisition is conditional on Prestiamoci obtaining EEA-wide PSD license approval, enabling European roll-out.
- Prestiamoci re-launched its platform in May 2014 and has since funded EUR 175k with and average revenue margin of 4%.
- Acquisition adds diversification to TrustBuddy’s existing offering into a product with lower regulatory risk and increased revenue visibility.
- Prestiamoci’s seasoned management team joining TrustBuddy management will bring significant experience within credit risk assessment.
- TrustBuddy expects to rollout a consumer instalment loan product in new markets in 2015, and envisages 80% of revenue from this new product from the Nordic markets.
In September 2014 Prestiamoci had concluded a financing round of 450K EUR and in October 2013 a previous capital increase of 550K EUR. According to sources, Digital Magics Angel Network ,which invested just a year ago and provided strategic support in refocusing Prestiamoci, achieves a gain of about 300% on the transaction.
TrustBuddy announced a 10M EUR equity raise. The proceeds of the share placing will be used by 5M EUR to fund the cash consideration (and related costs) of the acquisitions of Prestiamoci and Geldvoorelkaar, 2M EUR for strategic expansion and platform development costs, and 3MÂ EUR for working capital purposes.