Cornerstone FS PLC (AIM:CSFS) said it has agreed to a sale of Avila House, its electronic money subsidiary, to payment and lending services provider Aspire Commerce Ltd.
Aspire, trading as MalootMoney.com, will purchase Avila by way of a share purchase agreement.
Aspire will pay £300,000 in cash for Avila, the cloud-based provider of international payment solutions said, with proceeds used to strengthen existing cash resources.
Additionally, Aspire has entered into a software licencing agreement with Cornerstone to use its platform for 12 months for £290,000.
The licencing fee will be paid in stages throughout 2023, with the majority to be recognised in the second half of the year, it said.
Cornerstone said that it is in its best interests to dispose of its non-core subsidiary following Financial Conduct Authority (FCA) approval of its primary subsidiary, Cornerstone Payment Solutions, as an authorise electronic money institution in August 2021.
"This is an excellent deal for Cornerstone and reflects the value of an e-money registration as well as our platform,” said Cornerstone chief executive James Hickman.
“As we have said previously, we have experienced strong trading momentum throughout the year, and it is great to now be ending 2022 having secured an additional £600,000 for next year. We look forward to reporting on our further progress," Hickman added.
The completion of the share purchase agreement is conditional upon FCA approval, expected to occur in the first quarter of 2023.
Avila generated revenues of £197,996 and a profit of £2,418 in the year to end-December 2021.