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Ecsponent increases equity holding in Mybucks through participation in a private placement
ECSPONENT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: ECS - ISIN: ZAE000179594
(“Ecsponent” or “the Company”)
ECSPONENT INCREASES EQUITY HOLDING IN MYBUCKS THROUGH PARTICIPATION IN A PRIVATE PLACEMENT
1. INTRODUCTION
The board of directors of Ecsponent (“the Board”) is pleased to advise shareholders that
Ecsponent Limited, incorporated in Botswana, being a wholly owned subsidiary of the
Company (“Ecsponent Botswana”) has agreed the terms of a transaction that, if
implemented, will result in Ecsponent acquiring an additional 444 000 shares in MyBucks
S.A (“MyBucks”) resulting in an increase in Ecsponent’s holding in MyBucks to 12% (“the
Acquisition”).
The additional shares in MyBucks will be acquired through a private placement, whereby
Ecsponent Botswana will subscribe for the additional shares at a subscription price of
EUR9.00 per MyBucks share, payable in cash, resulting in a total consideration of
EUR3.996 million.
The balance of the private placement will substantially be taken up by vehicles related to
Messrs. Christian Angermayer and Gerd Alexander Schütz.
Mr. Angermayer is a German entrepreneur and investor, with over 20 years in business,
and has created, co-founded and invested in numerous successful companies across a
broad section of sectors. He has raised over EUR 1.5bn for his portfolio companies and
has been involved in more than 40 successful IPO- and M&A-transactions either as an
entrepreneur, investor or banker/advisor. He is the owner of Apeiron Investment Group,
his family office and merchant banking business.
Mr. Schütz is the managing partner and founder of C-Quadrat AG, an asset management
company which he founded together with his partner in 1991. C-Quadrat AG has
subsidiaries in Frankfurt am Main, London, Geneva, Warsaw and Yerevan and has recently
launched operations in Asia. Mr. Schütz is also one of the MyBucks’ shareholders and
Chairman of the Board. In 2017, Mr. Schütz joined the Supervisory Board of Deutsche Bank
AG.
2. ABOUT MYBUCKS
MyBucks is a financial technology company, listed on the Frankfurt Stock Exchange, that
currently has operations in 11 African countries, as well as, Poland and Australia. MyBucks
has enjoyed accumulate growth in its loan book and geographical footprint since the
commencement of its operations in 2011 and has introduced a number of innovations in
financial services, driven by technology, primarily artificial intelligence. MyBucks has been
growing both organically and inorganically and now boasts 5 banking licenses across its
group.
Apart from its financial services business, MyBucks also offers technology services to other
financial institutions and envisions to grow its technology arm particularly outside of
Africa.
3. RATIONALE FOR THE ACQUISITION
The private placement is being executed at a price that is a significant discount to the
current market price and the Board’s assessment of the value of the MyBucks shares. The
Mybucks’ shares currently trade at EUR11.30 (as at 05/02/2018), with the Acquisition
price representing a 20.4% discount to the current traded price.
4. EFFECTIVE DATE
The private placement is expected to become effective on Friday, 9 February 2018, being
the date of payment of the purchase consideration for the Acquisition.
5. FINANCIAL INFORMATION
In the 30 June 2017 financial year, being the last reported financial period, MyBucks
undertook a deliberate transition, enacted to benefit its long-term growth strategy; to
acquire heavily distressed traditional financial services and banking entities that it has
since successfully turned around.
MyBucks’ 2017 results, which were prepared in accordance with the International
Financial Reporting Standards as adopted by the European Union and on which an
unmodified audit opinion was received, reflect the effects of the transition in which the
company integrated four Opportunity Banks in Africa coupled with FairGo Finance in
Australia. The MyBucks' operating profit (EBIT) maintained at about EUR11 million from
the 2016 financial year to the 2017 financial year, despite an increase in the net loan book
from EUR38.8 million as of 30 June 2016 to EUR68.5 million at 30 June 2017 and a
corresponding revenue increase from EUR36.3 million to EUR53.7 million on the back of
an increase in disbursements by more than 50.0% to over EUR 120 million.
The results reflect a net asset value of EUR20.2 million which includes the first-time
consolidation of four new entities in Africa - Opportunity Banks Kenya, Mozambique,
Tanzania and Uganda - as well as FairGo Finance in Australia. The contribution to MyBucks’
profit and loss by the four Opportunity Banks was an after-tax loss of EUR5.1 million (with
a negative impact on operating profit of c. EUR4.3 million), excluding transaction costs.
Partially as a result of the complexity of the transaction, MyBucks also incurred a relatively
high amount of consultancy, legal and audit costs, accruing to EUR4.7 million during the
financial year. MyBucks’ acquisition of FairGo Finance contributed a marginally negative
impact to profitability as expected. Against these items, MyBucks recorded a gain on
bargain purchase of EUR2.85 million on the Opportunity Banks acquisitions.
As a high growth company, the costs of these acquisitions combined with continued
technological innovation has been absorbed in these results. Combining the growth in
scale and consolidating finance costs of the new entities, MyBucks’ finance costs
increased from EUR11.7 million to EUR21.3 million, representing an increase in gross
funding costs from 21.7% to 22.8%. As a result, MyBucks’ growth and integration strategy
resulted in an after-tax loss from continuing operations of EUR11.1 million for the financial
year, and an aggregate loss after tax of EUR12.1 million.
2017 saw the rollout of exciting technology and new products in existing and frontier
markets, increasing MyBucks’ global footprint. MyBucks' vision of bringing finance
products to excluded segments of the global market will continue to not only make a
significant impact in the lives and economies of the markets where it operates, but drive
significant growth for MyBucks moving forward. MyBucks won the 2017 European Fintech
award for Financial Inclusion segment.
A key focus for MyBucks during the upcoming 30 June 2018 financial year will be to reduce
its costs of funding and to refinance most of the high-yielding funding lines. In terms of
growth, MyBucks recorded disbursements of c. EUR 70 million for the first five months,
representing close to 60% of full disbursements for the entire previous year and an
annualised growth of c. 35% in disbursements prior to consolidating New Finance Bank
Malawi, expected to be completed in the 2018 year.
6. CONDITIONS PRECEDENT
The Acquisition is not conditional upon the fulfillment of any conditions precedent.
7. CLASSIFICATION OF THE ACQUISITION
The Acquisition is classified as a Category 2 transaction as contemplated in the Listings
Requirements of the JSE Limited.
Pretoria
9 February 2018
Sponsor
Questco Corporate Advisory Proprietary Limited
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