Netfin Acquisition, a US blank cheque company, has entered into a non-binding letter of intent (LOI) to merge with Triterras Fintech and the operating entities of Triterras Holdings.
The proposed merger is expected to enable Triterras to become a publicly-traded company on The Nasdaq Stock Market.
The potential transaction considers a pre-money equity value of around $670m for Triterras, which is a Singapore-based physical commodity trading and trade finance company. With the assumption that no shareholders of Netfin Acquisition exercise their redemptions rights, the post-money equity value of the fintech company is around $939m with an enterprise value of nearly $995m.
Established in 2012, Triterras built the Kratos marketplace, which is among the highest volume commodity trading and trade finance platforms in the world that facilitates direct online transactions for traders and lenders.
Apart from enabling buyers and sellers to trade commodities, the Kratos marketplace helps in arranging short-term trade finance.
The marketplace is also said to offer transformational benefits to traders, which include lower financing costs, faster cycle times, prevention of fraud, improved discovery, and higher quality analytics and reporting.
For lenders, Kratos is said to cut administration costs, lessens risk and fraud, besides offering a marketplace of prequalified and packaged borrowers with anti-money laundering and know your customer (KYC) solutions.
The other business segment of the fintech company is Rhodium Resources, which primarily engages in physical commodity trading and in offering trade financing to Triterras’ clients via the Kratos platform.
Triterras founder and chairman Srinivas Koneru said: “In our early days as an organization, we recognized the potential for technology to transform global trade finance. The combination of our technology and industry experixa
ience forms the backbone of an advanced and versatile platform that is unique in our field.”
In fiscal year 2019, the Singaporean fintech company registered more than $4.1bn of transaction volume, $87m in EBITDA, and $46m in net income on a consolidated basis.
Netfin Acquisition president comments on the merger with Triterras
Netfin Acquisition president and director Marat Rosenberg said: “Triterras fits the ideal criteria for the type of asset we have been seeking in our fintech SPAC mandate. Their business is disrupting a large and growing market with a proprietary fintech platform that makes transactions more cost efficient, secure, faster and scalable.
“Their successful operating track record and management’s deep industry expertise were also major factors in our overall evaluation process. For these reasons, among others, we believe Triterras will deliver very attractive returns for Netfin shareholders.”
The parties plan to sign a definitive agreement next month, with the deal likely to close during the third quarter of 2020.
