Accretive Combination with Avenida+ Will Allow Provision of End-To-End Solutions to Financial Institutions
Significantly Enhances Revenue and Enables near Term Positive Net Cash Flow
- Further establishes Mobi724 as a leading fintech in Latin America and leverages its first-mover advantage in the fast-growing payment card market.
- Will accelerate Mobi724's expansion into Latin America with an enhanced geographic presence, additional products and services, new revenue streams and numerous cross-selling opportunities.
- Enables a truly end-to-end AI-powered e-commerce solution encompassing transactional insights, card-linked rewards and offers, digital marketing and fulfillment - with online and offline reach.
- Adds a solid business, well-managed by a team with a track record of success at growing its customers and creating value.
- Acquisition is expected to be immediately accretive with positive cash flow and additional benefits from increased market presence and a broader offering.
- Post-transaction in fiscal year 2023, Mobi724 expects to be EBITDA positive and generate consolidated revenues between $18M to $24M.
- Mobi724 to host webinar Wednesday, March 3 at 10:00 AM ET (link provided below).
Montreal, Quebec--(Newsfile Corp. - March 2, 2022) - Mobi724 Global Solutions Inc. (TSXV: MOS) ("Mobi724" or the "Company"), a fintech enabler of real-time, AI-powered payment card-linked solutions, is pleased to announce it has entered into an agreement in principle (the "Agreement") with Avenida Inc. (the "Seller") to acquire all of the shares of Avenida Compras S.A. ("Avenida+"), a rapidly growing white-label marketplace and e-commerce business with a growing presence in Latin America (the "Transaction"). The purchase price payable by Mobi724 for Avenida+ will consist of an upfront payment of US$4.0 million, of which US$3.5 million will be paid in cash and US$0.5 million will be paid through the issuance of shares at their market price at the time of closing, subject to a minimum issue price of $0.05 per share as per the requirements of the TSX Venture Exchange ("TSX-V"), as well as potential additional payments of up to a further US$6.0 million, payable in cash and shares, based on Avenida+'s financial performance during the period ending December 31, 2023 (the "Earn-out Payment"). The maximum Earn-out Payment of US$6.0 million would be comprised of US$5,350,000 in cash and US$650,000 in shares to be issued at their market price on the date of payment, again subject to a minimum issue price of $0.05 per share. It is contemplated that the shares so issued would be issued directly to the Seller's shareholders in proportion to their equity holdings in the Seller, all of whom act at arm's length to the Company.
The Transaction is expected to close on or about May 15, 2022, and is subject to regulatory approval by the TSX-V, the Company securing the necessary financing, the execution of definitive documentation as well as certain conditions and closing adjustments which are customary for transactions of this nature. No finder's fee will be paid by the Company in relation to the Transaction.
Avenida+ has relationships with a number of banks with a current card base of approximately 24 million payment cards. Avenida+'s management will continue to be spearheaded by its current CEO and CFO, Daniel Jejcic and Mayra Fiszman respectively. Daniel and Mayra's leadership skills and entrepreneurial spirit have helped Avenida+ build white label e-commerce marketplaces that offer more than 100,000 products from over 4,500 merchants.
For the 12-month period ended June 30, 2021, Avenida+'s audited financials* are as follows:
| Cash | $ 0.9 million |
| Total Assets | $ 3.0 million |
| Total Liabilities | $ 0.6 million |
| Revenue | $ 2.5 million |
| Net Loss | $1.7 million |
| EBITDA | $0.8 million |
| *expressed in Canadian Dollars using an exchange rate from ARS to CAD of 0.013 as of June 30, 2021 | |
"We are truly pleased to make this transformational acquisition that further positions Mobi724 as a leading aggregator of real-time offers and rewards both online and offline in the Latin America region," said Marcel Vienneau, CEO of Mobi724. "We formed a strategic alliance with Avenida+ in November 2020, and in working together, we both experienced significant revenue-generating opportunities and an expanded sales pipeline. Avenida+'s management team has achieved strong success at growing its business, and as part of Mobi724, we look forward to working together to generate even further growth."
Avenida+'s hub is based in Buenos Aires, Argentina, and currently serves B2B clients across Latin America, including banks. Avenida+'s white-label marketplace platform allows payment card issuers, loyalty program operators, shopping mall associations, and other third parties to provide their customers with an infinite variety of online products and offers from local merchant networks or leading global brands. Avenida+'s marketplace is integrated into several payment networks, allowing for a rapid scaling-up across Latin America and is available either as a SAAS or as an E2E (end-to-end) model, including customer service, onboarding of merchants and logistics.
Marcel Vienneau added: "We will leverage Avenida+'s existing relationships with over 4,500 merchants and with banks having a current card base of approximately 24 million payment cards so as to enable us to monetize our AI-powered portfolio of solutions, such as cash back and pay with points. As a team, we aim to offer the most innovative portfolio of solutions to our Latam target market of approximately 1 billion payment cards."
"The demonstrated success of our partnership with Mobi724 was the motivating factor for us to take the next exciting step of joining forces so that together we can capture a larger share of the fast-growing Latin American market for payments and online marketplaces," added Daniel Jejcic, CEO of Avenida+. "The complementary nature of our businesses will enable 360° solutions for existing and future clients and create tangible value for cardholders."
In fiscal year 2023, Mobi724 expects to be EBITDA positive and to generate consolidated revenues of between $18M to $24M.
The Earn-out Payment under the Transaction will be tied to a US$12.5 million revenue target for Avenida+ in 2023. The overall acquisition price equates to a multiple of approximately 0.7x to 1x on Avenida+'s 2023 revenue target. The Company anticipates that the Transaction will be funded through a combination of debt, convertible debt and the issuance of shares and expects its basic/fully diluted share count to increase by between 15% to 20%.
Webinar Information:
Marcel Vienneau and Mathieu Laurin, CEO and CFO respectively of Mobi724, will co-host a webinar Wednesday, March 3 at 10:00 AM ET to discuss the Transaction.
Shareholders, investors, media representatives and other stakeholders are invited to join the webinar by following the instructions below:
https://attendee.gotowebinar.com/register/3278562676026012429
After registering, you will receive a confirmation email containing information about joining the webinar.
Alternatively, interested persons may also dial in using their phone:
Canada: +1 (647) 497-9389
United States: +1 (951) 384-3421
Access Code: 855-867-724
About Mobi724 Global Solutions Inc.
Make Every Transaction An Opportunity
Mobi724 Global Solutions Inc. (TSXV: MOS) is a fintech company that enables banks and merchants to offer their customers real-time payment card-linked incentives in a white-label format. Mobi724's objective is to add a layer of AI-driven actionable intelligence to every payment transaction, creating engaging consumer experiences & generating incremental commercial opportunities to its clients.
Cautionary Statement on Forward-Looking Information
This news release contains forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable Canadian securities laws, including statements relating to the completion of the Transaction and its terms, the financing of the purchase price payable under the Transaction, the effect of the Transaction on the financial results of the Company and the position of the Company in the marketplace. Statements, other than statements of historical facts, may be forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects", "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved", the negative of these terms and similar terminology although not all forward-looking statement contains these terms and phrases. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risk factors set out in the Company's annual and/or quarterly management discussion and analysis and in other of its public disclosure documents filed on SEDAR at www.sedar.com, as well as all assumptions regarding the foregoing. The forward-looking statements relating to Mobi724's expectation that it will be EBITDA positive and generate consolidated revenues of between $18M to $24M in fiscal year 2023 depend on a number of factors including, but not limited, to the successful implementation of Mobi724 and Avenida+'s business plans and business integration. The aforementioned forward-looking statements are also based on certain assumptions including, but not limited to, the assumption that the Company maintain its existing client base and current growth rate, monetize a percentage of existing qualified sales leads, that foreign currency exchange rates will remain within the projected rate, and that the timing of revenue recognition from qualified sales leads will remain consistent with historical sales cycle timeliness. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements (including, but not limited to, the volume of transactions, amount of transaction fees, number of cards under management, number of vendors and merchants, and delay to close qualified sales leads) are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frame or at all. Except where required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
THIS NEWS RELEASE DOES NOT CONSTITUTE A SOLICITATION TO BUY OR SELL ANY SECURITIES IN THE UNITED STATES AND IS NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Investor Relations:
For further information, please visit www.MOBI724.com or contact:
Marcel Vienneau, CEO
Mobi724 Global Solutions Inc.
T: 514-394-5200 ir@mobi724.com
Nicole Piasentini, Investor Relations
NATIONAL Capital Markets
T: 647-382-9373 npiasentini@national.ca
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/115427
