Regulatory News

Equals Group plc (AIM:EQLS), a leading fintech payments group focused on the SME marketplace, announces that it has entered into a conditional agreement to acquire the entire issued and to be issued share capital of Roqqett Limited (‘Roqqett’), an open banking payments platform, for a total consideration of up to £2.25 million (the ‘Acquisition’).  The Acquisition is conditional upon regulatory approval from the Financial Conduct Authority (‘FCA’).

Background

Roqqett is authorised by the FCA as both an AISP (Account Information Service Provider) and PISP (Payment Initiation Service Provider), two licences that Equals currently does not hold.  These licences allow Roqqett to perform the full suite of open banking services, namely, to take payments and access financial data. As such, Roqqett can disrupt the traditional methodology of consumers paying merchants, both in person and online, via debit and credit cards.

Established in November 2019 by Glenn Smith, who previously held senior roles with UBS and Barclays in FX Derivatives followed by over a decade in technology start-ups, the Roqqett team leveraged its significant experience across finance, payments, and disruptive technologies to develop the platform.

Strategic Rationale

Roqqett has a proprietary platform, utilising its regulatory licences, that builds on existing payment systems coupled with state-of-the-art APIs with next generation security.  Businesses that receive payments will benefit from Roqqett’s platform through a cheaper and quicker method of payment, while consumers benefit from enhanced security, which results in no card details being shared and the use of established biometric approvals already installed on their mobile devices.

In addition to the AISP and PISP licences, the benefits for Equals of this technology fall into three major categories:

• Roqqett enables Equals to take part in the full payment lifecycle for its Corporate and Enterprise customers by adding the B2B2B/C leg to the ultimate consumer.  Direct account to account payments via Roqqett offers an alternative to debit cards, credit cards and traditional push payments, giving Equals B2B customers immediate access to funds sent by their B2C or B2B customers with a smoother consumer experience. Having this capability will widen the use-cases and addressable markets for both Equals Money and Equals Solutions.
  

• The Equals infrastructure, incorporating the own-name IBAN capabilities and direct connection to Faster Payments, will significantly enhance the Roqqett proposition on a stand-alone basis.  The platform can be sold to merchants as a complete end-to-end solution encompassing the ability to process refunds automatically, a service not typically provided by ‘standard’ open banking integrations with third party bank accounts.
  

• The data capabilities of the technology will allow Equals to make machine-learning-informed, rapid decisions on risk-management for B2B customers who are on the platform.  Equals will have complete transparency of the customer activity and as such can assess suitability for forward contracts and perform enhanced transaction monitoring.

Consideration Overview

The Acquisition consideration will be satisfied by an initial £1.0 million cash payment (reduced by the amount of the gross liabilities of Roqqett) followed by three deferred payments one of up to £0.25 million satisfied in cash (when Roqqett receives the benefit of R&D tax credits) and two of £0.5 million, one in cash and the other satisfied by the issue of ordinary shares in Equals, struck at the five-day volume-weighted average price of 87.23p as of Friday, 25 November 2022.  The second and third deferred payments become due when certain capabilities are added to the platform and are expected to be paid in under one year.  The initial consideration will be funded from Equals' existing cash resources and the Acquisition is expected to be earnings accretive for the Group in the medium term.

For the year ended 31 December 2021, Roqqett had a loss before tax of £0.57 million and had assets of £0.2 million.

Glenn Smith, CEO of Roqqett, said: “Roqqett has developed a unique checkout experience for the rapidly growing market in open banking payments.  This offering is enhanced with the addition of Equal’s capabilities in IBANs and their membership of the Faster Payments Scheme.  The team at Roqqett is looking forward to working with Equals to maximise the potential for both platforms arising from this Acquisition.”

Commenting on the Acquisition, Ian Strafford-Taylor, CEO of Equals, said: “We are delighted to announce the acquisition of Roqqett and its cutting edge open-banking payment platform and welcome Glenn and his team to the Equals Group.  Similar to the Equals Connect transaction announced in October, the transaction is made possible by the continued strong performance of the Group and our surplus cash balances.

“The platform, underlying technology, and licences that we are acquiring fit well with our stated strategy of providing payments solutions to our B2B customer base. The ability to provide our corporate customers with an alternative route to acquire payments from their B2B or B2C customers is the last piece of the jigsaw in terms of Equals participation in the full payment lifecycle.  This Acquisition allows us to fast-track this capability which in turn will widen our addressable markets for our services and ultimately drive growth.”

This announcement contains inside information.

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Notes to Editors:

Equals Group is a technology-led international payments group augmented by highly personalised service for the payment needs of SME’s whether these be FX, card payments or via Faster Payments. Founded in 2007, the Group listed on AIM in 2014 and currently employs around 285 staff across sites in London and Chester.  For more information, please visit www.equalsplc.com.