Netfin Acquisition Corp. (Nasdaq: NFIN,
NFINW) (“Netfin” or the “Company”), a special purpose
acquisition company targeting businesses in the fintech industry,
and Triterras Fintech Pte Ltd. (“
Triterras
Fintech”), a leading fintech company for commodity trading
and trade finance, have entered into a definitive agreement for
Triterras Fintech to become a publicly listed company (the
“Business Combination Agreement”). Upon closing of the transaction,
a newly formed Cayman holding company to be named “Triterras” will
acquire Triterras Fintech and Netfin and register its shares for
listing on the Nasdaq Stock Market under a new ticker symbol.
Following Netfin’s announcement of a non-binding
letter of intent to combine with Triterras Fintech and its
affiliate, Triterras Holdings Pte. Ltd. on June 29, 2020, the
parties made the strategic decision for Netfin to combine solely
with Triterras Fintech and not with its affiliated Rhodium
commodity trading business in order to create a standalone,
fast-growing fintech pure-play business with a 100% fee-based
platform and no balance sheet exposure.
Founded in 2018, Triterras Fintech is a leading
fintech company focused on trade and trade finance. Its proprietary
Kratos™ digital marketplace is one of the world’s largest commodity
trading and trade finance platforms that connects and enables
commodity traders to trade and source capital from lenders directly
online. Triterras Fintech monetizes the Kratos platform by charging
fees to its users on their trading and financing transaction
volumes. It maintains a presence in key trading centers across the
world, including Singapore, the U.K. and the U.S.
Netfin and Triterras Fintech believe Kratos is
the only non-petroleum commodity trade and trade finance platform
of scale and a first mover in solving critical industry challenges.
Kratos solves many of these challenges and directly addresses the
$1.5 trillion annual trade finance shortfall reported by the WTO by
linking lenders and traders, and allowing them to transact directly
on the platform in a significantly more cost-effective, secure and
faster way. Sourcing trade finance is identified as the
largest issue for many commodity traders.
In fiscal year 2019, Triterras Fintech generated
$3.6 billion of transaction volume, $16.9 million of revenue, $14.8
million of EBITDA and $13.2 million of net income. The company
projects to generate approximately $7.8 billion of transaction
volume, $56.6 million of revenue and $39.8 million of EBITDA for
fiscal year 2020 (12 months ending February 28, 2021) and grow at
more than a 60% compound annual growth rate (“CAGR”) through
2023.
Trade finance is a $40 trillion industry that
provides funding for global trade. Kratos has rapidly become a
trusted platform enabling buyers and sellers to trade commodities
as well as facilitate short-term trade finance. For traders, the
trade financing is critically important to fund physical commodity
purchases while in transit and prior to delivery. Kratos provides
significant benefits to traders including access to trade finance,
lower financing costs, faster cycle times, fraud prevention,
improved discovery, and higher quality analytics and reporting.
Equally impactful to lenders, Kratos reduces administration costs,
abates risk and fraud, and provides access to prequalified and
packaged borrowers with anti-money laundering and “know your
customer” solutions.
“Our business combination with Triterras Fintech
creates a leading pure-play fintech company that is digitizing a
large and growing industry, while making transactions more
cost-efficient, secure and faster,” said Marat Rosenberg, President
and Director of Netfin. “This is a high-margin, fast-growing
platform business with scale. As a public company with access to
capital markets to fund its growth, we believe Triterras Fintech
will deliver strong near and long-term value for Netfin
shareholders. We look forward to supporting Triterras Fintech’s
leadership through their new growth phase as a public company.”
Triterras Fintech Founder, Chairman and CEO
Srinivas Koneru added: “Triterras Fintech’s tech-enabled platform
combined with our deep industry experience provides us a
first-mover advantage in disrupting the physical trade and trade
finance industry. COVID-19 has rapidly accelerated the migration of
trade as well as trade finance to our online platform, Kratos,
which has experienced a significant increase in customer activity
and transaction volumes since the onset of this pandemic. The
experience and capital that Netfin adds will enable us to
accelerate our growth and more effectively capitalize on our
pipeline and broader market opportunity.”
Transaction Terms &
FinancingThe combined company will have an estimated $674
million pro forma enterprise value and a $854 million pro forma
market cap and no debt, assuming no redemptions of Netfin
shareholders. Estimated net cash proceeds to the balance
sheet totaling approximately $180 million, assuming no redemptions
by Netfin shareholders, will be used to support Triterras’
exponential organic growth, expanded geographies, supply chain
financing and additional platform modules. Triterras’ growth
strategy is expected to generate $123 million of revenue, $84
million of EBITDA and $71 million of net income for fiscal year
2021 (12 months ending February 29, 2022). Based on these
estimates, the transaction has a post-money enterprise value to
fiscal year 2021 revenue multiple of 5.5x, an enterprise value to
fiscal year 2021 EBITDA multiple of 8.0x and a price to fiscal year
2021 earnings multiple of 12.0x.
Triterras Fintech’s current shareholders are
rolling 90% of equity holdings into the combined company. The
business combination has been unanimously approved by the boards of
directors of both Netfin and Triterras Fintech, and is expected to
close in the fourth quarter of 2020, subject to regulatory and
shareholder approvals, and other customary closing conditions.
A summary of the terms of the proposed
transaction, as well as an investor presentation, is included in a
Current Report on Form 8-K to be filed by Netfin with the U.S.
Securities and Exchange Commission (the “SEC”). Additional
information about the proposed transaction will be described in
Netfin’s preliminary proxy statement relating to the acquisition,
which it will file with the SEC.
AdvisorsB. Riley FBR is acting
as capital markets advisor to Netfin. White & Case LLP and
Winston & Strawn LLP are acting as legal advisors to Netfin.
Millbank is acting as legal advisor to Triterras Fintech. Ellenoff
Grossman & Schole LLP is acting as counsel to B. Riley FBR.
Gateway Group is acting as investor relations adviser to both
Netfin and Triterras Fintech.
Conference Call & Webcast
InformationNetfin and Triterras Fintech management will
host a conference call to discuss the transaction today, July 29 at
12 noon Eastern time.
Toll-free dial-in number: (833) 519-1250International dial-in
number: (914) 800-3823Conference ID: 5497486
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at (949)
574-3860.
The conference call will be broadcast live and available for
replay here and on Netfin’s website at netfinspac.com.
A telephonic replay of the conference call will be available
after 4:00 p.m. Eastern time on the same day through August 5,
2020.
Toll-free replay number: (855) 859-2056 International replay
number: (404) 537-3406Replay ID: 5497486
About Netfin Acquisition
Corp.Netfin Acquisition Corp. is a blank check company
incorporated for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses, focused on the
financial technology, technology and financial services industries,
including businesses engaged in commercial, online and mobile
banking and payments, trade finance and telecommunications, that
offer a differentiated technology platform and product suite for
interfacing with the financial services sector. For more
information, visit netfinspac.com.
About Triterras
FintechTriterras Fintech is a leading fintech company
focused on trade and trade finance. It launched and operates
Kratos—one of the world’s largest commodity trading and trade
finance digital marketplaces that connects and enables commodity
traders to trade and source capital from lenders directly online.
For more information, visit triterras.com.
Forward Looking StatementsThis
press release includes “forward-looking statements” within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. Netfin’s and Triterras Fintech’s
actual results may differ from their expectations, estimates and
projections and consequently, you should not rely on these forward
looking statements as predictions of future events. Words such as
“expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, Netfin’s and Triterras Fintech’s expectations with
respect to future performance and anticipated financial impacts of
the business combination, the satisfaction of the closing
conditions to the business combination and the timing of the
completion of the business combination. These forward-looking
statements involve significant risks and uncertainties that could
cause the actual results to differ materially from the expected
results. Most of these factors are outside Netfin’s control and are
difficult to predict. Factors that may cause such differences
include, but are not limited to: (1) the outcome of any legal
proceedings that may be instituted against Netfin or Triterras
Fintech following the announcement of the Business Combination
Agreement and the transactions contemplated therein; (2) the
inability to complete the business combination, including due to
failure to obtain approval of Netfin’s shareholders or other
conditions to closing in the Business Combination Agreement; (3)
the occurrence of any event, change or other circumstance that
could give rise to the termination of the Business Combination
Agreement or could otherwise cause the transactions contemplated
therein to fail to close; (4) the inability to meet Nasdaq’s
listing requirements following the business combination; (5) the
impact of COVID-19 on Netfin or Triterras Fintech; (6) the risk
that the business combination disrupts current plans and operations
as a result of the announcement and consummation of the business
combination; (7) the ability to recognize the anticipated benefits
of the business combination, which may be affected by, among other
things, competition and the ability of the combined company to grow
and manage growth profitably and retain its key employees; (8)
costs related to the business combination; (9) changes in
applicable laws or regulations; (10) the possibility that Netfin,
Triterras Fintech or the combined company may be adversely affected
by other economic, business, and/or competitive factors; and (11)
other risks and uncertainties indicated from time to time in the
proxy statement/prospectus relating to the business combination,
including those under “Risk Factors” in the Registration Statement,
and in Netfin’s other filings with the SEC. Netfin cautions that
the foregoing list of factors is not exclusive. Netfin cautions
readers not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. Netfin does not
undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in its expectations or any change in events,
conditions or circumstances on which any such statement is
based.
Non-IFRS Financial MeasuresThis
press release includes EBITDA, which is a financial measure not
prepared in accordance with International Financial Reporting
Standards (“IFRS”). Triterras Fintech believes this financial
measure is a useful performance measure that allows for an
effective evaluation of Triterras Fintech’s operating performance
when compared to its peers, without regard to its financing methods
or capital structure. However, EBITDA is not a financial measure
calculated in accordance with IFRS and should not be relied on or
considered as a substitute for, or in isolation from, financial
measures calculated in accordance with IFRS.
Other companies may calculate EBITDA and other
non-IFRS financial measures differently, and therefore Triterras
Fintech’s non-IFRS financial measures may not be directly
comparable to similarly titled measures of other companies.
Triterras Fintech defines EBITDA as net income before interest
income, interest expense, income taxes, depreciation and
amortization. Triterras Fintech’s computation of EBITDA may not be
identical to other similarly titled measures of other companies.
For a reconciliation of EBITDA to the nearest comparable IFRS
financial measures, see below.
EBITDA Reconciliation for FY19 |
|
|
($ in millions) |
|
Net Income |
$13.2 |
|
(-) Interest Income |
($0.0 |
) |
(+) Interest Expense |
0.0 |
|
(+) Tax Expense |
1.6 |
|
(+) Depreciation and Amortization |
0.0 |
|
EBITDA |
$14.8 |
|
Because IFRS financial measures on a
forward-looking basis are not accessible, and reconciling
information is not available without unreasonable effort, we have
not provided reconciliations for forward-looking non-IFRS measures
for our full year 2020 guidance. For the same reasons, we are
unable to address the probable significance of the unavailable
information, which could be material to future results.
Important Information about the Business
Combination and Where to Find It In connection with the
proposed business combination, Triterras intends to file with the
SEC a registration statement on Form F-4 (the “Registration
Statement”) which will include a proxy statement/prospectus and
certain other related documents, which will be both the proxy
statement to be distributed to Netfin’s shareholders in connection
with Netfin’s solicitation of proxies for the vote by Netfin’s
shareholders with respect to the business combination and other
matters as may be described in the Registration Statement, as well
as the prospectus relating to the offer and sale of the securities
of Triterras to be issued in the business
combination. Netfin’s shareholders and other
interested persons are advised to read, when available, the
preliminary proxy statement/prospectus included in the Registration
Statement and the amendments thereto and the definitive proxy
statement/prospectus, as these materials will contain important
information about the parties to the Business Combination
Agreement, Netfin and the business combination. After
the Registration Statement is declared effective, the definitive
proxy statement/prospectus will be mailed to Netfin’s shareholders
as of a record date to be established for voting on the business
combination and other matters as may be described in the
Registration Statement. Shareholders will also be able to obtain
copies of the proxy statement/prospectus and other documents filed
with the SEC that will be incorporated by reference in the proxy
statement/prospectus, without charge, once available, at the SEC’s
web site at www.sec.gov, or by directing a request to: Netfin
Acquisition Corp., 445 Park Avenue, 9th Floor, New York, NY 10022,
Attention: Gerry Pascale, Chief Financial Officer, (972)
979-5995.
No Offer or SolicitationThis press release
shall not constitute a solicitation of a proxy, consent or
authorization with respect to any securities or in respect of the
business combination. This press release shall also not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any states
or jurisdictions in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of section 10 of the Securities Act.
Participants in the Solicitation Netfin
and its directors and executive officers may be deemed participants
in the solicitation of proxies from Netfin’s shareholders with
respect to the business combination. A list of the names of those
directors and executive officers and a description of their
interests in Netfin is contained in Netfin’s registration statement
on Form S-1, which was filed with the SEC on July 19, 2019, and is
available free of charge at the SEC’s web site at www.sec.gov, or
by directing a request to Netfin Acquisition Corp., 445 Park
Avenue, 9th Floor, New York, NY 10022, Attention: Gerry Pascale,
Chief Financial Officer, (972) 979-5995. Additional information
regarding the interests of such participants will be contained in
the Registration Statement when available.
Investor Relations
Contact:Gateway Investor RelationsCody Slach and Matt
Glover(949) 574-3860NFIN@gatewayir.com
Netfin Contact:Marat Rosenberg,
President(972) 757-5998
Triterras Contact:Jim Groh(678)
237-7101
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