A publicly-traded firm based mostly in Montvale is dipping its toes within the fintech market with a multimillion greenback acquisition, making good on its 2019 announcement of a strategic resolution to enter the area.
On Wednesday, MICT Inc. (Nasdaq: MICT) stated it entered an settlement to amass a wholly-owned subsidiary of International Fintech Holdings for $26 million.
The funding for the deal, which is topic to sure closing circumstances, features a personal placement of convertible notes of as much as $15 million from MICT, consisting of $11 million in dedicated funding – which shall be convertible into shares of frequent inventory in MICT at a conversion value of $1.10 – with the flexibility to lift a further $four million on the identical phrases.
MICT stated it plans to deploy the raised funds to double-down with additional fintech-related acquisitions and to enter partnerships that may develop GFH’s on-line platforms, whereas delivering speedy earnings development and enhancing long-term shareholder worth.
“GFH is the primary main step for MICT into the fintech area and we anticipate that it’s going to quickly be adopted by additional vital partnerships and acquisitions. This profitable elevating of considerable new capital in right this moment’s extraordinarily opposed market circumstances is testomony to the large potential of GFH as a platform for MICT’s technique,” Darren Mercer stated in a ready assertion. Mercer, the chief government officer and a board member of MICT assumed the function of interim CEO of the corporate efficient April 2, 2020. David Lucatz resigned from his function as president and CEO of MICT, the corporate stated, however will proceed to serve on its board of administrators.
The deal has two main areas of focus for MICT: on-line brokerage for equities buying and selling, and the gross sales of insurance coverage merchandise in overseas markets.
Initially, the main focus shall be on the supply of companies in China, MICT stated, the place it sees worth in a market with rising want for funding merchandise and wealth administration companies.
“We imagine that the GFH acquisition represents a novel alternative for traders to take part within the quickly increasing transfer of China’s burgeoning center class into monetary companies,” Mercer stated. “The explosive development of inventory buying and selling is anticipated to proceed, whereas the insurance coverage sector, during which GFH has a variety of key business relationships, is growing apace as customers speed up their shift in direction of transacting by way of on-line platforms.”
MICT stated that GFH is at a sophisticated stage to launch its inventory buying and selling providing – which is designed to serve each the B2B and B2C market – in China. The corporate stated that on-line inventory buying and selling volumes in that nation quadrupled from $445 million in 2018 to $1.eight trillion in 2019.
GFH’s work within the insurance coverage sector serves retail and business purchasers, and although the market in China remains to be early, MICT stated it has already expertise vital development, with complete premium estimated to succeed in $2.36 trillion by 2032.
As of press time, MICT was buying and selling at $0.99 on Nasdaq.