Peer-to-peer lender SocietyOne sells to ASX-listed MoneyMe in $ 132 million deal

ASX-listed fintech MoneyMe hopes to acquire one of the country’s premier fintechs, SocietyOne, in a deal worth $ 132 million.

Surprisingly, the merger did not provide an immediate exit for several key lenders from the personal loan market over the past decade.

Leading media companies, including News Corp, Seven West Media and Consolidated Press Holdings, as well as Australian Capital Equity and Westpac’s venture capital fund, Reinventure, make up approximately 60% of SocietyOne’s share register, and have all voluntarily agreed to sequester their holdings until MoneyMe’s 1H23 Results in February 2023. They will hold between 18.3% and 18.7% of the MoneyMe (ASX: MME) shares issued upon completion of the acquisition in March 2022.

Earlier this year, SocietyOne joined Afterpay on Westpac’s digital banking platform, 10X, and was expected to work on an ASX listing before the deal was announced with MoneyMe on Friday.

The merger implementation agreement was signed this week. MoneyMe shareholders will vote to approve the merger at an extraordinary general meeting on February 1, with the transaction scheduled to close on March 15.

The script-based acquisition is worth $ 132 million based on MoneyMe’s stock price of $ 1.76 on December 16. A series of conditions must be met for the merger to proceed, including at least 92.5% of SocietyOne shareholders accepting MoneyMe shares as consideration and a range of benchmarks around their value before the deal goes ahead. be concluded.

Shareholders representing 79% of SocietyOne’s book have signed the MIA and 78% have elected to receive the Scrip’s consideration.

The merger will be a major boost for MoneyMe, which floated in December 2019 to $ 1.25 a share after raising $ 45 million. Shares surged on opening day of trading to $ 1.72 – close to SocietyOne’s offer price.

MoneyMe shares fell 1.42% from Friday, with tech stocks continuing their pre-Christmas drop to close at $ 1.735.

The merger with SocietyOne will strengthen MoneyMe’s loan portfolio by 72% to $ 934 million, increasing annualized revenue by 63% to $ 146 million. The merger will also generate more than $ 15 million in annual synergies in pre-tax revenue.

MoneyMe CEO Clayton Howes said the deal offers immediate scale benefits and additional income opportunities, as part of the company’s ambition to be Australia’s premier non-bank credit provider. .

“The strategic value is immense for both companies, and we are incredibly excited. The opportunity to accelerate growth and profitability is quickly realized by combining the strengths of the two brands and migrating the operations of SocietyOne to MoneyMe’s Horizon technology platform, ”he said.

“The SocietyOne brand will continue to thrive and benefit from access to MoneyMe’s diverse product set and ability to deliver leading customer experiences.

“We will develop many innovations, including the SocietyOne credit score product which will be offered to MoneyMe customers and the Banking-as-a-Service partnership with Westpac which we will continue to explore. “

If 100% of SocietyOne shareholders accepted the scrips, they would own 30.5% of MoneyMe after the transaction.

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