Change Financial (ASX:CCA) - CEO, Alastair Wilkie
CEO, Alastair Wilkie
Source: iTWire
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  • Change is on the horizon at fintech Change Financial (CCA) after the company announced it would buy financial services business Wirecard today
  • The U.S.-based financials stock, which offers banking-as-a-solution (BaaS) services, came out of a trading halt today to announce the $7.8 million buy
  • Specifically, Change will acquire all the assets in Wirecard’s Australian and New Zealand divisions
  • Significantly, it seems Change’s latest fundraising foray, alluded to in the company’s trading halt announcement on Tuesday, September 8, will be used to fund the acquisition
  • The raise includes a placement to raise $6.4 million and a non-renounceable two-for-11 entitlement offer to raise $4.9 million
  • Under both components, shares are priced at 9.5 cents each
  • Following the news, Change Financial shares have soared 52.2 per cent to trade for 17.5 cents

Change is on the horizon at fintech Change Financial (CCA) after the company announced it would buy financial services business Wirecard today.

The U.S.-based financials stock, which offers banking-as-a-solution (BaaS) services, came out of a trading halt today to announce the $7.8 million buy.

Specifically, Change will acquire all the assets in Wirecard’s Australian and New Zealand divisions.

Wirecard provides card management and payment platform solutions to banks and fintechs alike. Presently, its technology hosts more than 120 customers across over 35 countries. Many of those clients are blue-chip stocks, such as Australia’s big four banks, homegrown supermarket giants, and Asian and South American banks and fintechs.

Positively, Change says the deal carries an enterprise value (EV) and revenue multiple of 0.5x. Generally speaking, a lower multiple can indicate a business is primed for growth and could be undervalued. Over FY20, Wirecard brought in roughly US$11.1 million (around A$15.4 million) in revenue.

Significantly, it seems Change’s latest fundraising foray, alluded to in the company’s trading halt announcement on Tuesday, September 8, will be used to fund the acquisition.

Spare change

Change financial also released the details of its latest $11.3 million capital raising venture today.

The raise includes a placement to raise $6.4 million and a non-renounceable two-for-11 entitlement offer to raise $4.9 million. Under both components, shares are priced at 9.5 cents each.

The issue price marks a 17.4 per cent discount to CCA’s last close price, which came in at 11.5 cents a pop. It’s also a 21.3 per cent discount to the company’s 15-day volume-weighted average price — 12.1 cents per share.

Together, investment managers Altor Advisory Partners and Cannacord Genuity will act as joint lead managers to the venture.

Shares issued under the placement are expected to settle by next Thursday, September 17, and begin trading on the same day.

Meanwhile, Change’s entitlement offer is set to close on September 30, while the results of the raises second component will be announced on October 5.

Following the news, Change Financial shares have soared 52.2 per cent to trade for 17.5 cents at 1:56 pm AEST.

CCA by the numbers
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