– equitable Deal Includes Strategic Pivot to Blend Solely with Triterras Fintech’s Leading Kratos Online Marketplace, Developing a Standalone, Fast-Growing Fintech Pure-Play Business –
– Transaction to Create One of the World’s Highest Volume Commodity Trading and Trade Finance Platforms –
– Maximum Post-Transaction Enterprise Value of $674 Million, or even 8.0x Estimated 2021 EBITDA of $84.3 million –
– Triterras Fintech Shareholders Will Roll 90% of Their Equity market to the Combined Business –
NEW YORK and SINGAPORE, July 29, 2020 (GLOBE NEWSWIRE) — Netfin Acquisition Corp. (Nasdaq: NFIN, NFINW) (“Netfin” or the “Company”), a special purpose acquisition company targeting companies in the fintech business, and Triterras Fintech Pte Ltd. (“Triterras Fintech”), a top fintech firm for commodity trading and trade finance, have entered into a definitive agreement for Triterras Fintech to become a publicly listed company (the “Business Combination Agreement”). Upon closure of this transaction, a newly formed Cayman holding firm to be called “Triterras” will obtain Triterras Fintech and Netfin and enroll its own shares for listing on the Nasdaq Stock Marketplace under a new ticker symbol.
After Netfin’s statement of a non-binding letter of intent to unite with Triterras Fintech and its affiliate, Triterras Holdings Pte. Ltd. on June 29, 2020, the parties made the tactical decision for Netfin to unite entirely with Triterras Fintech rather than using its affiliated Rhodium commodity trading firm so as to create a stand alone, fast-growing fintech pure-play Company with a 100% fee-based platform without a balance sheet vulnerability.
Launched in 2018, Triterras Fintech is a top fintech firm focused on commerce and trade finance. Its proprietary Kratos™ digital market is among the world’s biggest commodity trading and trade finance platforms which connects and empowers commodity traders to exchange and origin capital from creditors directly online. Triterras Fintech monetizes the Kratos platform by charging fees to its customers in their trading and funding trade volumes. It keeps a presence in key trading facilities around the planet, such as Singapore, the United Kingdom. and the U.S.
Netfin and Triterras Fintech think Kratos is the sole non-petroleum commodity commerce along with trade finance platform of scale and also a primary mover in solving critical business challenges. Kratos solves several of these challenges and immediately addresses the $1.5 trillion yearly trade fund shortfall documented from the WTO by linking creditors and investors, and permitting them to transact right on the platform at a more cost-effective, protected and quicker manner. Sourcing trade fund is recognized as the greatest issue for most commodity dealers.
In financial year 2019, Triterras Fintech made $3.6 billion of trade volume, $16.9 million of earnings, $14.8 million of EBITDA and $13.2 million of earnings. The business projects to generate roughly $7.8 billion of trade volume, $56.6 million of earnings and $39.8 million of EBITDA for fiscal year 2020 (12 months ending February 28, 2021) and increase at greater than the usual 60% compound annual growth rate (“CAGR”) during 2023.
Trade fund is a $40 trillion business that offers financing for international trade. Kratos has quickly become a trustworthy platform allowing buyers and sellers to exchange commodities in addition to facilitate short-term trade fund. For dealers, the transaction financing is seriously important to finance physical product purchases while in transit and before shipping. Kratos provides important advantages to traders such as access to trade finance, lower funding costs, faster cycle times, fraud prevention, enhanced detection, and greater quality reporting and analytics. Equally impactful to creditors, Kratos reduces government costs, abates fraud and risk, and gives accessibility to prequalified and packed borrowers using anti-money laundering and “know your customer” options.
“Our business combination with Triterras Fintech creates a leading pure-play fintech company that is digitizing a large and growing industry, while making transactions more cost-efficient, secure and faster,” stated Marat Rosenberg, President and Director of Netfin. “This is a high-margin, fast-growing platform business with scale. As a public company with access to capital markets to fund its growth, we believe Triterras Fintech will deliver strong near and long-term value for Netfin shareholders. We look forward to supporting Triterras Fintech’s leadership through their new growth phase as a public company.”
Triterras Fintech Founder, Chairman and CEO Srinivas Koneru included: “Triterras Fintech’s tech-enabled platform combined with our deep industry experience provides us a first-mover advantage in disrupting the physical trade and trade finance industry. COVID-19 has rapidly accelerated the migration of trade as well as trade finance to our online platform, Kratos, which has experienced a significant increase in customer activity and transaction volumes since the onset of this pandemic. The experience and capital that Netfin adds will enable us to accelerate our growth and more effectively capitalize on our pipeline and broader market opportunity.”
Transaction Conditions & Financing
The joint firm will have an estimated $674 million pro forma business value plus a $854 million pro forma market cap without a debt, supposing no redemptions of Netfin shareholders. Estimated internet cash proceeds to the balance sheet at roughly $180 million, assuming no redemptions by Netfin shareholders, will be utilised to encourage Triterras’ exponential organic expansion, enlarged geographies, supply chain funding and extra stage modules. Triterras’ growth plan is forecast to earn $123 million of earnings, $84 million of EBITDA and $71 million of net earnings for financial year 2021 (12 months ending February 29, 2022). Based on these quotes, the trade has a post-money venture value to financial year 2021 earnings multiple of 5.5x, a venture value to financial year 2021 EBITDA several of 8.0x and a price to financial year 2021 earnings multiple of 12.0x.
Triterras Fintech’s present investors are rolling 90% of equity holdings to the joint firm. The company combination was approved by the boards of supervisors of the two Netfin also Triterras Fintech, and is anticipated to close in the fourth quarter of 2020, subject to regulatory and shareholder approvals, and other customary closing conditions.
A review of the conditions of this proposed trade, in addition to an investor presentation, is comprised in a Current Report on Form 8-K to be submitted by Netfin together with all the U.S. Securities and Exchange Commission (the “SEC”). Additional information concerning the proposed trade will be clarified in Netfin’s preliminary proxy statement concerning the acquisition, which it will register with the SEC.
B. Riley FBR is behaving as capital markets adviser to Netfin. White & Case LLP and Winston & Strawn LLP are acting as legal advisors to Netfin. Millbank is acting as legal adviser to Triterras Fintech. Ellenoff Grossman & Schole LLP is acting as adviser to B. Riley FBR. Gateway Group is acting as investor relations advisor to Netfin and Triterras Fintech.
Conference Call & Webcast Information
Netfin and Triterras Fintech management will host a conference call to go over the transaction today, July 29 in 12 pm Eastern time.
Toll-free dial-in amount: (833) 519-1250
Global dial-in amount: (914) 800-3823
Seminar ID: 5497486
please telephone the conference phone number 5-10 minutes before the beginning time. An operator will register your title and company. In case you have any difficulty connecting with the conference call, please contact Gateway Investor Relations in (949) 574-3860.
The conference call will be broadcast live and available for replay here and on Netfin’s site at netfinspac.com.
A telephonic replay of this conference call will be available after 4:00 p.m. Eastern time on exactly the exact same day during August 5, 2020.
Toll-free replay amount: (855) 859-2056
International replay number: (404) 537-3406
Replay ID: 5497486
About Netfin Acquisition Corp.
Netfin Acquisition Corp. is a blank check company incorporated for the purpose of effecting a merger, discuss exchange, asset purchase, share purchase, reorganization or similar business combination with one or more companies, concentrated on the fiscal engineering, engineering and financial services businesses, such as companies engaged in commercial, online and mobile banking and payments, trade finance and telecommunications, that provide a distinguished technology platform and product package for interfacing with all the financial services industry. To learn more, see netfinspac.com.
About Triterras Fintech
Triterras Fintech is a top fintech firm focused on commerce and trade financing. It established and works Kratos—among the world’s biggest commodity trading and trade finance digital marketplaces that joins and empowers commodity traders to exchange and origin capital from creditors directly online. To learn more, see triterras.com.
Forward Looking Statements
This media release includes “forward-looking statements” over this meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Netfin’s and Triterras Fintech’s real results may differ from their expectations, projections and estimates and therefore, you shouldn’t rely on those forward looking statements as predictions of future events. Words for example “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify these forward-looking statements. These statements statements comprise, without limit, Netfin’s and Triterras Fintech’s expectations with regard to future operation and expected financial impacts of the company mix, the gratification of the closing conditions to the business mix and also the timing of the conclusion of the company combination. These forward-looking statements involve substantial risks and uncertainties that may cause the actual results to differ materially from the anticipated effects. The majority of these variables are out Netfin’s control and are difficult to forecast. Factors which may cause these differences include, but aren’t restricted to: (1) the result of any legal proceedings that may be instituted against Netfin or even Triterras Fintech after the statement of the Business Combination Agreement and the transactions contemplated therein; (2) the inability to fill out the company mix, including because of failure to receive acceptance of Netfin’s shareholders or other conditions to closing from the Business Combination Agreement; (3) the occurrence of any event, alter or other circumstance which could contribute to the conclusion of the Business Combination Agreement or may otherwise lead to the transactions contemplated therein to neglect to shut ; (4) the inability to meet Nasdaq’s listing requirements following the business combination; (5) the impact of COVID-19 on Netfin or Triterras Fintech; (6) the risk that the business combination disrupts current plans and operations as a result of the announcement and consummation of the business combination; (7) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of the combined company to grow and manage growth profitably and retain its key employees; (8) costs related to the business combination; (9) changes in applicable laws or regulations; (10) the possibility that Netfin, Triterras Fintech or the combined company may be adversely affected by other economic, business, and/or competitive factorsand (11) other risks and uncertainties indicated from time to time in the proxy statement/prospectus relating to the company combination, including those under “Risk Factors” in the Registration Statement, and in Netfin’s other filings with the SEC. Netfin cautions that the foregoing list of factors is not exclusive. Netfin cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Netfin does not undertake or even accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Non-IFRS Financial Measures
This press release includes EBITDA, which is a financial measure not prepared in accordance with International Financial Reporting Standards (“IFRS”). Triterras Fintech believes this financial measure is a useful performance measure that allows for an effective evaluation of Triterras Fintech’s operating performance when compared to its peers, without regard to its financing methods or capital structure. However, EBITDA is not a financial measure calculated in accordance with IFRS and should not be relied on or considered as a substitute for, or in isolation from, financial measures calculated in accordance with IFRS.
Other companies may calculate EBITDA and other non-IFRS financial measures differently, and therefore Triterras Fintech’s non-IFRS financial measures may not be directly comparable to similarly titled measures of other companies. Triterras Fintech defines EBITDA as net income before interest income, interest expense, income taxes, depreciation and amortization. Triterras Fintech’s computation of EBITDA may not be identical to other similarly titled measures of other companies. For a reconciliation of EBITDA to the nearest comparable IFRS financial measures, see below.
|EBITDA Reconciliation for FY19|
|($ in millions)|
|(-) Interest Income||($0.0||)|
|(+) Interest Expense||0.0|
|(+) Tax Expense||1.6|
|(+) Depreciation and Amortization||0.0|
Because IFRS financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-IFRS measures for our full year 2020 guidance. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Important Information about the Business Combination and Where to Find It
In connection with the proposed company combination, Triterras intends to file with the SEC a registration statement on Form F-4 (the “Registration Statement”) which will include a proxy statement/prospectus and certain other related documents, which will be both the proxy statement to be distributed to Netfin’s shareholders in connection with Netfin’s solicitation of proxies for the vote by Netfin’s shareholders with respect to the company combination and other matters as may be described in that the Registration Statement, as well as the prospectus relating to the offer and sale of the securities of Triterras to be issued in the company mix. Netfin’s shareholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus included in the Registration Statement and the amendments thereto and the definitive proxy statement/prospectus, as these materials will contain important information about the parties to the Business Combination Agreement, Netfin and the business mix. After the Registration Statement is declared effective, the definitive proxy statement/prospectus will be mailed to Netfin’s shareholders as of a record date to be established for voting on the business combination and other matters as may be described in the Registration Statement. Shareholders will also be able to obtain copies of the proxy statement/prospectus and other documents filed with the SEC that will be incorporated by reference in the proxy statement/prospectus, without charge, once available, at the SEC’s web site at www.sec.gov, or by directing a request to: Netfin Acquisition Corp., 445 Park Avenue, 9th Floor, New York, NY 10022, Attention: Gerry Pascale, Chief Financial Officer, (972) 979-5995.
No Offer or Solicitation
This press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the business combination. This press release shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities legislation of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act.
Participants from the Solicitation
Netfin and its directors and executive officers may be deemed participants in the solicitation of proxies from Netfin’s shareholders with respect to the business mix. A list of the names of those directors and executive officers and a description of their interests from Netfin is contained in Netfin’s registration statement on Form S-1, which was filed with the SEC on July 19, 2019, and also is available free of charge at the SEC’s web site at www.sec.gov, or by directing a request to Netfin Acquisition Corp., 445 Park Avenue, 9th Floor, New York, NY 10022, Attention: Gerry Pascale, Chief Financial Officer, (972) 979-5995. Additional information regarding the interests of participants will be contained in the Registration Statement available.
Investor Relations Contact:
Gateway Investor Relations
Cody Slach along with Matt Glover
Marat Rosenberg, President