Equals Group acquires Effective FX for £1.6m
has acquired certain assets from the international payments business of Effective FX (“EFX”) for a maximum consideration of £1.6m, to be satisfied from existing cash resources.
EFX is described as a ‘well-established’ international payments and e-banking group focusing on International payments, currency solutions and FX Risk Management.
EFX was founded and run by Amir Mehrad, since its incorporation in 2012. This morning’s statement outlined that Amir will join Equals to further develop its B2B sales process.
The immediately earnings enhancing acquisition primarily comprises the purchase of EFX's client book of more than 200 corporate clients, from a wide range of industries, which generated adjusted EBITDA of approximately £0.5 million for the 12-month period to 31 August 2020.
The first instalment of £0.125m is payable 14 days after completion, with three more instalments of £0.125m at six months, nine months and twelve months following the successful completion of the acquisition.
Subsequently, there are eight further instalments, subject to certain revenue hurdle ramping to £2.6m over three years, bringing the maximum consideration for the acquisition to £1.6m.
Equals said extensive due diligence was performed on the customer base of Effective FX and its business in order to allow the business to be integrated into the company seamlessly.
Shares in Equals Group have traded strongly in the past two weeks to close at 25.5p on Wednesday afternoon.
EQLS price chartEquals said the acquisition showed the continuing growth of the Group in B2B international payments via its three routes to market: ‘firstly, directly to its own customers; secondly, via its Equals connect B2B2B strategy; and thirdly, via the acquisition of compatible businesses.’
CEO, Ian Strafford-Taylor, said the acquisition highlighted Equals’ key strengths in the B2B international payments arena; its openness to M&A opportunities, its versatility in acquiring volumes and revenues, and the strength of its payment’s infrastructure and technology.
The group said it is ‘increasingly being approached by other international payments businesses’ and said it will continue to selectively acquire companies that meet its criteria.
Concurrently with the acquisition, Equals said its Connect business is growing strongly through the strength of its proposition and taking advantage of issues at competitors.
The Company has added 12 new white-label partners in 2020 to date, bringing the total to 25, with more in the pipeline. Turnover through the group’s platform has increased 64% in the same period and is only set to grow further as new clients increase activity. Equals said that it sees the platform as ‘a key aspect of its B2B growth strategy for 2020 and beyond.’
In addition, the group will continue to advance its strategy with a new CRM system in December to yield improved client acquisition and increased revenues from its customers.
A new sales commission structure has been implemented to incentivise customer acquisitions while a B2B-focused website, Equals Money, is now live. Equals said these steps form part of its wider growth strategy which will be outlined ‘in the coming months.’
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