Supply@ME Capital PLC (LON:SYME) said it agreed to buy TradeFlow Capital Management Pte. Ltd, a Singapore-based fintech-powered commodities trade enabler, in a cash and share deal.
Supply@ME will pay an initial £4mln in cash and issue 813mln new shares at market price at the completion date, which is expected to be by the end of June.
Further earn-out payments, covering the period from January 2021 to December 2023, will be made in cash or shares based on TradeFlow achieving annual revenue targets.
TradeFlow has been independently valued at about £31mln, Supply@ME said. The valuation is based on the positive track record of funds launched, the Intellectual Property rights related to the proprietary digital platform (TradeFlow+) and the TradeFlow business plan to 2025.
The acquisition will enable Supply@ME to further enhance its platform, delivering a global inventory monetisation service, including the monetisation of both inventory "in-transit" (in particular, commodities), and warehoused goods, it said.
READ: Supply@ME Capital making progress on proposed TradeFlow acquisition
The company said it intends to fund the initial cash component of the transaction from an investment of fresh capital being finalised with a group of new institutional investors.
“We have been continually impressed by the quality of the business that Tom and John have built, having established themselves as a respected funder for inventory in transit, particularly among SME-sized businesses,” said Alessandro Zamboni, chief executive of Supply@ME.
“By bringing TradeFlow into the Supply@ME stable, we will have an offering for the supply chain sector which surpasses anything available globally, with vast opportunities to create even more value for our investors."
“The economic and physical challenges throughout the pandemic have left many businesses with - even if it is a cliché to say so - an unprecedented set of supply chain issues for goods on the move,” added John Collis, chief risk officer and co-founder of TradeFlow Capital.
“We look forward to joining forces with Alessandro and his team in due course, and improving the working capital position of even more businesses with the backing of Supply@ME."
Supply@ME enables businesses to generate cashflow, without incurring debt, by monetising their existing stock.
"Our non-credit approach to enabling physical commodity import/export transactions is unique in the trade finance hedge fund world, as is Supply@ME's approach to inventory monetisation for manufacturing and trading businesses,” said Tom James, chief executive and co-founder of TradeFlow Capital.
“The combination of the expertise in TradeFlow Capital and Supply@ME, will broaden our shared geographic footprint and create a global digitised offering which will create a number of benefits from both a funding, technology and customer origination perspective,” he concluded.
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