ASX Announcement 16 August 2023 Splitit obtains a US$50 million strategic growth commitment from Motive Partners Splitit Payments Limited (Splitit” or the“Company”) (ASX:SPT), is pleased to announce that it has signed a definitive agreement for an investment of up to US$50 million (approximately AU$76 million1) from funds advised by Motive Partners (together with its affiliates, “Motive”) to accelerate Splitit’s growth and support the execution of its strategic plan. The proposed US$50 million investment is comprised of two US$25 million tranches in exchange for the issuance of new preference shares (the“Placement”). The first US$25 million tranche will be invested immediately upon shareholder approval of (1) the Company voluntarily delisting from ASX (“Delisting”) and (2) the redomicile of the Company from Israel to the Cayman Islands by means of a share-exchange accomplished through a merger (as described in greater detail below) (the “Redomicile”, together with the Placement and the Delisting, being the “Proposed Transaction”). The second US$25 million tranche will be invested upon Splitit achieving certain 2023 full-year financial performance milestones (which Splitit is currently exceeding)2 and the satisfaction of certain customary closing conditions. Further details on key investment terms, including material conditions precedent, are provided in Annexure A. Further details on the Delisting, Redomicile, and Explanatory Memorandum are provided in Annexure B. After a comprehensive review of strategic alternatives, Splitit’s Board unanimously concluded that the Proposed Transaction represents the best available opportunity to create long-term shareholder value for the following reasons: - Access to significant growth capital: Amidst a difficult fundraising environment and after considering strategic alternatives, Splitit has secured a substantial investment that will significantly strengthen the Company’s capital position and accelerate its ability to attract large and sophisticated clients, develop strategic partnerships, and invest behind its innovative white-label technology platform. - Partnership with a top-tier financial sponsor: Motive, a global specialist private equity firm exclusively focused on financial technology, has a strong history of investing in market leading companies and accelerating value creation through its unique in-house technology innovation capabilities, roster of accomplished industry talent, and deep network across the global financial services industry. - Splitit is undervalued as a listed company: The Board considers that the ASX-listed enterprise value of Splitit undervalues the business. This is primarily due to a lack of liquidity and a lack of appreciation of the Company’s differentiated value proposition and prospects. 1 Indicative based on the 1.528 USD to AUD exchange rate on 8 August 2023. All other amounts in this announcement quoted in USD. 2 Targets are currently exceeded measured on a year to date basis to 31 July 2023. - Greater flexibility as a private company: If redomiciled, as a private, Cayman Islands company Splitit is expected to benefit from significantly lower administrative costs, a more flexible operating environment, a superior ability to attract and retain talent, and improved prospects of accessing future growth capital at an attractive valuation. - Provides optionality for existing shareholders: Existing shareholders will have the flexibility to choose to participate in the Company’s value creation by retaining ownership in Splitit as a private company or to decrease ownership through trading on ASX prior to the completion of the Delisting. As a private company, Splitit expects to have a partnership with PrimaryMarkets, a private share trading platform, to facilitate periodic trading in Splitit shares during the period subsequent to the completion of the Delisting. Nonetheless, there is no assurance or guarantee that there will be sufficient liquidity in the private share trading platform to facilitate shareholders being able to sell their shares.
...
SPT Price at posting:
7.6¢ Sentiment: Hold Disclosure: Held
