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Payments technology business Equals Group has accepted a £283 million cash offer from Alakazam Holdings BidCo, a consortium comprising TowerBrook Capital Partners, J.C. Flowers & Co, and shareholders of embedded finance platform Railsr.
The fintech company's shareholders will receive 140 pence per share, consisting of 135 pence in cash plus a 5 pence special dividend. The offer represents a 37 per cent premium to Equals' closing price of 102.5 pence on 31 October 2023, before the offer period commenced.
Alakazam plans to merge Equals, a cross-border payments provider, with Railsr, a banking-as-a-service platform they are acquiring in a separate transaction. The combined entity aims to become one of Europe's largest embedded finance platforms, integrating Railsr's technology with Equals' foreign exchange capabilities.
Alan Hughes, Non-Executive Chairman of Equals, said: "Whilst the Board remains confident in the Equals Group's long-term prospects, we also acknowledge the challenges of the next phase of our strategy, and the need for scale to remain competitive in attracting larger target clients."
The ownership structure will see TowerBrook and J.C. Flowers each holding 28.75 per cent, with Railsr shareholders controlling 42.5 per cent. Equals directors, who hold approximately 2.2 per cent of shares, have committed to vote in favour of the deal, alongside shareholders representing an additional 14.3 per cent of the company.
Lord Hammond, Chairman of Railsr, commented that the deal "represents a major strategic step for Railsr at a pivotal moment in the development of the embedded finance market" and would create "a significant new player" in the sector.
The transaction, which requires regulatory approval including from the Financial Conduct Authority, is expected to complete in the second quarter of 2025. Lazard and Canaccord Genuity are advising Equals on the transaction.
The deal follows Equals' announcement of a strategic review in November 2023, during which multiple proposals were evaluated before accepting Alakazam's improved offer.
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