Investors keen to gain early exposure to rising companies before they list publicly will soon be able to do so via Complii Fintech (ASX: CF1) which is set to acquire investments platform Primary Markets via an off-market takeover.
The proposed acquisition has been confirmed in the form of a Bid Implementation Agreement which would see PrimaryMarkets join Complii as a wholly owned subsidiary with minimal change to operations.
While already offering a range of capital raising services for ASX-listed companies, the acquisition of PrimaryMarkets extends Complii’s reach into the non-listed sector.
Founded in 2016, PrimaryMarkets enables the trading of securities in unlisted companies. Using the platform, privately-held companies can get access to capital via PrimaryMarkets’ network of 110,000 global investors as well as their share registry services to maintain regulatory compliance.
To date, PrimaryMarkets has listed more than 380 private investment opportunities which have generated more than $187 million in trade liquidity. Some of the better known companies to use PrimaryMarkets include cryptocurrency exchange Kraken and gaming tech company Animoca Brands which has since become a tech unicorn after the ASX kicked the company off Australia’s exchange.
With the acquisition of PrimaryMarkets, Complii would be able to facilitate the transition of an unlisted company onto the ASX once they are ready to scale their business via access to larger capital.
Consideration for the acquisition includes 105 million CF1 shares which at their last close of $0.051 equates to approximately $5.35 million with a further 37 million Options to be issued. That allocation of Options include 16 million with an exercise price of $0.075 and 21 million at $0.10, all expiring 24 months after completion of the proposed acquisition.
All together, vendors of PrimaryMarkets would hold approximately 25% of Complii shares if the acquisition is approved by CF1 shareholders at the upcoming Complii AGM.
Under the proposal, PrimaryMarkets Founder Gavin Solomon would join the Complii Board as an Executive Director, bringing with him more than 35 years of experience in Australian and Asian Equity Capital Markets.
Listing on the ASX themselves in December 2020 via a backdoor listing, Complii offer B2B financial services for stockbrokers and AFSL holders. Their most popular product, AdvisorBid is an online platform that processes the backend administration for Institutional Placements, taking care of all paperwork via digital signatures to expedite the process for ASX-listed companies to complete a Placement with maximum investor reach.
In FY21, more than $14.7 billion of funds were raised on the AdvisorBid platform where brokers and AFSL holders pay subscription fees to Complii rather than a percentage of funds raised. This resulted in a 59% increase in revenue over the year to $2.72m for Complii, of which $2.15m was locked in as recurring revenue.
No financials for PrimaryMarkets were disclosed by Complii but the acquisition has the full support of the PrimaryMarkets Board.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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