Equals to acquire open banking platform Roqqett for up to £2.25 million
Fintech payments group Equals Group plc (LON:EQLS) announces that it has entered into a conditional agreement to acquire the entire issued and to be issued share capital of Roqqett Limited, an open banking payments platform, for a total consideration of up to £2.25 million.
The acquisition is conditional upon regulatory approval from the UK Financial Conduct Authority (FCA).
The acquisition consideration will be satisfied by an initial £1.0 million cash payment (reduced by the amount of the gross liabilities of Roqqett) followed by three deferred payments one of up to £0.25 million satisfied in cash (when Roqqett receives the benefit of R&D tax credits) and two of £0.5 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 £0.57 million and had assets of £0.2 million.
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.
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.”