Motive Partners will make the investment in two tranches, the first $25m tranche immediately after Splitit’s voluntarily delisting from ASX and re-domiciliation, and the second $25m tranche, upon Splitit achieving certain performance milestones
Splitit to secure investment from Motive Partners. (Credit: Patrick Tomasso on Unsplash)
Splitit Payments has signed a definitive agreement to secure up to $50m investment from funds advised by Motive Partners, to advance its growth and support its strategic plan.
Motive Partners will make the proposed $50m investment in two tranches of $25m each, in exchange for the issuance of new preference shares.
It will invest the first tranche of $25m immediately upon shareholder approval for Splitit’s voluntary delisting from Australian Securities Exchange (ASX).
The investment is also subject to Splitit changing its official headquarters from Israel to the Cayman Islands by means of a share exchange through merger.
Motive Partners will invest the second tranche of $25m, upon Splitit achieving certain 2023 full-year financial performance milestones and meeting certain customary closing conditions.
Splitit chair Dawn Robertson said: “We are delighted to secure this significant capital commitment from a world-class private equity sponsor.
“Motive is the ideal partner to help us drive future value creation due to its extensive payments expertise, value-additive capabilities, and deep industry relationships.
“The Board unanimously concluded that the Proposed Transaction represents the best available opportunity to create long-term value for Splitit’s existing shareholders.”
Splitit said that following a complete review of strategic alternatives, its Board of Directors unanimously approved the proposed transaction.
The company believes that the transaction will strengthen its capital position, help attract large clients, develop strategic partnerships, and invest behind its white-label technology platform.
Motive is a private equity firm exclusively focused on financial technology companies.
Building on its unique in-house technology, capabilities, industry talent, and deep network across the financial services industry worldwide, Motive enhances value creation.
Splitit’s Board considers that the ASX-listed enterprise value of Splitit undervalues the business, primarily due to a lack of liquidity and appreciation of its value proposition.
By redomiciling to the Cayman Islands, the company benefits from reduced administrative costs, a flexible operating environment, enhanced talent retention, and access to future growth capital.
Splitit managing director and CEO Nandan Sheth said: “Attracting a strategic investor of this calibre is a testament to the quality of our team and our unique, innovative offering – especially given difficult market conditions for raising capital.
“This level of investment significantly strengthens our balance sheet, allowing the team to focus on our white-label product strategy, innovation, and our Tier One global distribution partners.”
In February 2020, Motive completed its previously announced acquisition of a majority stake in Fiserv Investment Services business for about $510m in net after-tax proceedings.