Spenda to acquire Limepay for $8 million
ASX-listed Spenda Limited have announced that it has signed a binding term sheet to acquire 100% of the issued shares in Limepay Pty Ltd. The acquisition is an all-scrip transaction for a total purchase price of up to $8 million, payable in four tranches, three of which are performance based.
Limepay, established in 2019, is trusted by over 200 businesses to provide payment process and embedded finance services. Limepay provides a robust and scalable cloud-based platform comprising a portfolio of software tools to enable corporates and financial institutions to provide white-labeled embedded finance solutions to their customers. These include a suite of leading payment technologies to fuel business growth, encompassing payment acceptance, instalment options, lending, working capital, marketplace solutions and SaaS offerings.
Limepay’s technology has been developed in-house, with all Intellectual Property and copyright over the platform.
The team of eight experienced fintech developers have extensive experience in the payments technology space, providing a valuable upskilled resource pool to complement Spenda’s development team.
In FY24, Limepay generated $2.8 million in revenue (unaudited) and a gross profit of $1.4 million (unaudited).
Limepay has a robust pipeline of enterprise level clients at various stages in the sales cycle, that are expected to contract to use Limepay’s products, as well as take up Spenda’s products suite. As such, Spenda has linked Tranche 3 and 4 of the Deferred Consideration Shares to specific revenue milestones based on Limepay’s internal company forecasts, detailed below.
Limepay Pty Ltd rebranded in 2022 and trades as April Solutions.
The acquisition of Limepay will enable Spenda to accelerate its current projects, expand its product suite, and enter new verticals. with immediate deployment and revenue generating opportunities.
The acquisition of specific payments IP that is commercial and has no deployment risk is expected to deliver an immediate benefit for Spenda’s existing customers, enabling them to readily deploy in market solutions that provide whole of business end to end payment solutions and services.
Both businesses have identified immediate revenue generating opportunities in each business’ customer requirements that will allow the merged business to maximise the payment and software revenue wallet share. This will enable Spenda to leverage the merged business’ revenue generating capabilities and provide economies of scale benefits in improved operating margin.
Limepay’s Card Not Present as-a-service solution and their ability to deliver Platform on Record services to customers is in strong demand.
With growth expected through efficiency and integrated capabilities, the focus of the combined group will rationalise the roadmap enabling us to bring products to market faster and accelerate revenue from existing contracted key customer networks.
Limepay’s experienced team of financial and payments technology developers will significantly expand Spenda’s product development resources and capability. The integration of the Limepay team with the Spenda team in the overall development team will provide an immediate resource and product release cycle benefit, whilst also removing payments and product capability bottlenecks within the current resource pool, bolstering the overall capabilities of the combined team, enhancing our East Coast presence and providing continuity in services to existing customers.
The merged software suite will enable Spenda to better compete in the digital payments segment with a much more robust product suite with an almost end to end service offering.
Spenda expects to provide investors with more detail on the acquisition and merged entity once the company is in receipt of requisite Limepay shareholder approval.
Spenda Managing Director Adrian Floate said, “This is a high value acquisition for Spenda that brings product capability, exceptional people, great customers and many opportunities to work together to drive revenue growth. The combined entity will have an expanded product suite that will enhance its competitive positioning in market and enable access to new customers and market verticals. From an operational perspective, the addition of a high-quality team of banking software engineers will accelerate our current project pipeline and improve our operational efficiency. We have complementary product roadmaps, and the ability to scale payment flows across the combined entity which we expect will increase our wallet share per customer.”
Tim Dwyer, Founder and Director of Limepay said, “We are extremely excited about the opportunity to create a leader in the embedded finance space by integrating with Spenda and its management team led by Adrian. I believe it will be a great cultural fit for both our organisations and we’re excited to be part of Spenda’s next chapter, I believe the transaction will position us to execute significant business opportunities and create a leading payments company for enterprise customers.”
