Urban FT said that its board contacted the Digiliti Money chairman with an all-cash purchase offer that would enable the company to avert potential bankruptcy proceedings.
Urban FT plans to the fund the acquisition, if is accepted by Digiliti Money, through Morgan Stanley, on behalf of its principal investor.
However, the purchase price has not been disclosed by the firm.
Urban FT's offer comes in the wake of recent weeks trade press reports on Digiliti Money’s financial difficulties and the appointment of a new interim CEO to reduce costs and seek funding in the face of falling revenue.
Earlier this week, Digiliti Money indicated that it is conducting a review of strategic options for restructuring of the company. The options include the potential sale of the company itself or filing for Chapter 11 bankruptcy.
Urban FT COO Glen Fossella said: “Our goal in approaching Digiliti Money with an attractive and timely offer is to keep the business operating and viable as we consolidate the entities to leverage the savings from operational synergies.
“We believe that our cash offer—with the option for certain shareholders, at their discretion, to convert their Digiliti Money common stock to Urban FT common stock—represents the best benefit to all parties involved, most particularly the consumers who rely on the services of Digiliti Money’s clients.
Fossella continued: “We’re able to move quickly to rescue Digiliti because of the support of the Urban FT board of directors and investors, and because we have a clearly defined acquisition strategy that focuses on businesses with strong client relationships, recurring revenues and technologies that deliver an additional competitive advantage to our core products and services.
“Digiliti Money is within our acquisition parameters, and, ultimately, we believe will deliver an earnings-accretive outcome to all relevant stakeholders.”
According to Fossella, the acquisition faces only the usual caveats of conducting satisfactory due diligence related to the operational, financial and legal affairs of Digiliti Money; and Digiliti Money undergoing a satisfactory audit, among others.
Image: Urban FT offers to buy Digiliti Money. Photo: Courtesy of nokhoog_buchachon/FreeDigitalPhotos.net.
