Breaking Forex News… Social trading pioneer Ayondo has announced plans for a listing for the company on the Singapore Exchange (SGX), which would result in the company having a market capitalization in the S$210 million (USD $155 million) range post transaction, valuing Ayondo at about $116 million pre-deal.
FCA-regulated Ayondo stated that it is in advanced negotiations with an SGX-listed company on a Reverse Takeover transaction. This could result in Ayondo being the first fintech company to be listed on the SGX.
Following the completion of the proposed Reverse Takeover, Ayondo shareholders will own 75% of the new consolidated group. The proposed transactions will involve the injection of substantial fresh capital (Ayondo don’t state how much though). The resulting listed entity will trade under Ayondo’s name, and will be fully controlled and managed by current Ayondo management.
Ayondo had previously raised a total of about CHF 15 million (USD $16 million) in venture capital funding, including from Singapore-based Private Equity group Luminor Capital.
The planned transaction also highlights to us the increasing popularity of anything social in the Far East, including social trading. We earlier saw Chinese financial giant Ping An put some serious money into social trading focused Forex broker eToro, as part of a $27 million private financing round by eToro at the end of 2014.
What is a Reverse Takeover?
A Reverse Takeover is a type of merger used by private companies to become publicly traded without resorting to an initial public offering. It is effected by having a (usually smaller) publicly traded company buy a (usually larger) private company, paying with its own shares. The public company will issue more new shares than it had outstanding before the deal, such that the shareholders of the (now acquired) private company end up owning more than 50% of the combined entity. When completed, the private company has effectively become a publicly traded one.
A Reverse Takeover is also commonly known as a reverse merger or a reverse IPO.
Why do a Reverse Takeover, instead of a traditional IPO?
Ayondo claims to have over 190,000 users from 195 countries. With its business currently growing at a significant pace, the company believes that accessing the capital markets is the next major step required in the attainment of its ambitious growth targets. To this end, Ayondo has opted for a Reverse Takeover rather than the traditional Initial Public Offering (IPO), given the current volatility in financial markets. In such market conditions, a Reverse Takeover provides greater certainty as key terms such as funds raised and valuation are agreed between buyer and seller, and not necessarily subject to prevailing market conditions as is always the case in an IPO. The Reverse Takeover route also offers other advantages, such as lower listing costs.
Robert Lempka, CEO of the Ayondo Group, said:
We are extremely excited about our proposed Singapore listing as this will provide an excellent platform to accelerate growth and brand awareness globally, Asia in particular. The new group will be financially powerful and will enable us to continue to execute our ambitious plans.
The listing will provide a true market value for Ayondo and provides a platform for Ayondo’s future growth and is an important step for its global ambition. Ayondo intends to use net proceeds of the proposed Reverse Takeover to further grow the existing business by investing in enhanced mobile technology.
With the company’s core markets currently being in Europe, the proposed transaction on the SGX will be a milestone in Ayondo’s expansion into Asia. This move follows the opening of an Ayondo Singapore office in July 2014 after Singapore-based private equity fund, Luminor Capital Pte. Ltd., became a significant stakeholder in the group.
Dr Foo Fatt Kah, Luminor Capital Pte. Ltd.’s co-founder and Managing Director, added:
This maiden FinTech listing will be a milestone for Singapore’s equity market and we anticipate that investor participation will be active and sustained. We believe that social trading will be one of the key online financial services platforms of the future and Ayondo is well positioned to become one of the global leaders in this field.
The proposed RTO remains subject to the entry into definitive agreement and required shareholder approval.