Swedish growth investor Verdane has agreed a recommended cash deal to take Augmentum Fintech private at 111p per share, valuing the London-listed fintech fund at approximately £185.7 million.
Augmentum Fintech has several leading UK Fintechs in its portfolio, including Tide, Zopa, and Iwoca, but the vehicle has struggled to attract investor interest has traded at a deep discount to the portfolio valuation.
The favoured solution to this, as announced today, is to take it private.
The offer represents a 27% premium to Augmentum’s closing price of 87.4p on 24 February and a 29.6% premium to the three-month weighted average.
Augmentum’s board has unanimously backed the deal, advised by Cavendish, which considers the terms fair and reasonable.
The acquisition is being made through Frontier Bidco, a newly formed vehicle controlled by Verdane through its Freya XII fund.
“Since our IPO in 2018, Augmentum has been at the heart of the UK and European fintech sectors, backing high-growth companies such as Tide, Zopa, Iwoca, Cushon and Interactive Investor,” said William Reeve, Chairman of Augmentum.
“However, we recognise that for our shareholders, this portfolio’s potential has not been reflected in Augmentum’s market valuation.
Over several years, we have faced a persistent and widening discount to Net Asset Value, compounded by low levels of liquidity. This has made it difficult for shareholders to realise the true value of their holdings or for Augmentum to raise the capital necessary to support our ambitions.
To address this, the Augmentum Board has run a process to consider a range of strategic options. We are now recommending the Verdane offer, the best we received. This offer provides an immediate solution: it offers full liquidity at a 27.0% premium to the prevailing share price as at the Latest Practicable Date.