Listed Aussie fintech iSignthis acquires 100% of Lithuania’s Baltic Banking Service

Listed Aussie fintech iSignthis acquires 100% of Lithuania’s Baltic Banking Service

iSignthis Ltd (ASX: ISX | FRA: TA8) announces that it has acquired 100% of the share capital of UAB Baltic Banking Services.

BBS is located in Lithuania, and has developed specialised banking software that allows rapid connectivity to the SEPA Core and SEPA Instant networks, together with the development of specialised core banking modules on a basis of document driven solution including client onboarding (KYC, AML), transaction core, product configuration, electronic document management (automated document relations and storage), reporting, etc, which will integrate with Paydentity™ and incorporate components of iSignthis’ patented intellectual property.

With Lithuania becoming a jurisdiction of choice for banking, payments and emoney operators1, the Company sees advantages in BBS’ integration with the Central Bank of Lithuania’s (“CBL”) CENTROLink service2.

The CBL provides technical access for any EU authorised bank, emoney institution and payment service provide (“PSPs”), enabling the PSPs to send and receive SEPA payments. CENTROlink is a payment system operated by the Bank of Lithuania, providing a key gateway, clearing, and settlement mechanism (“CSM”) to the Single Euro Payments Area (SEPA). The CBL is unique amongst Eurosystem central banks in accepting PSP’s licensed in other jurisdictions to gain access to its CENTROLink CSM.

About 100 financial companies and start-ups from Britain and elsewhere are applying for a licence in burgeoning fintech hub Lithuania to ensure they have access to the European Union after Brexit, the CBL told Reuters3.

BBS is a registered testing partner with the CBL, and already provides services to more than 16 CBL licensed financial institutions, including 8 banks/credit unions, and 8 payment service providers, making it the leading integration provider for gateway services into the CBL.

Strategy

Synergy of BBS technology including SEPA GATEWAY and the Probanx® CorePlus banking platform, and together with ISXPay® and Paydentity™, will create a fully integrated solution for banks, emoney institutions, and wallet operators.

BBS will extend their network engineering experience as well as core banking “know-how” into other jurisdictions, including Australia’s New Payments Platform and others, leveraging their network engineering skills.

Deal Terms

The Company will issue on 28th February 2019 converted to AUD$ at the RBA spot of €75k in ordinary shares at the entire February monthly VWAP, plus a €75k payment (“Initial Payment”).

An earn out applies, based upon multiplier of EBIT at 31st December 2019 minus the Initial Payment, capped at €1.5m, payable as 85% ordinary shares and 15% cash component. EBIT estimate will be provided to market post mid year audit, or as major contracts develop.

John Karantzis, CEO of iSignthis said, “BBS is a high calibre, specialised provider of network and core banking services, that complements our Probanx® CORE Banking, ISXPay® transaction banking and Paydentity™ identity verification platforms. I welcome the BBS team, led by Raimundas Maciulevicius, into the iSignthis Group, and look forward to working closely with them to take advantage of the opportunities in Lithuania and beyond”.


1 https://investlithuania.com/news/google-receives-electronic-money-institution-license-from-bank-of-lithuania/

2 https://www.lb.lt//en/centrolink

3 https://mobile.reuters.com/article/amp/idUSKCN1PX15X

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