Longtime crowdfunding champion Seedrs has announced today that it has entered a definitive agreement to be acquired by U.S. based private investment firm Republic for approximately $100 million (£75 million). Through the acquisition, the two companies aim to create the first global private investment platform.
When Republic closed a Valor Equity Partners led $150 million Series B round, CoinDesk reported that the funding would be allocated to, “expand globally, develop new investment products and otherwise build up its business.” Well, we now know, at least in part, the modus operandi behind Republic’s global expansion efforts.
With the EU’s “new rules” coming into effect when it comes to crowdfunding, a sector that’s been on the medium burner for a while now, has suddenly seen a scotch bonnet’s worth of seasoning. Cross-town competitor, and if you’ll remember, one-time merger partner, Crowdcube (ultimately blocked by the UK’s CMA back in March) have been cooking up a five-alarm chili as of late.
As part of the deal, Seedrs CEO Jeff Kelisky will join Republic’s leadership team and continue as Seedrs CEO, with Seedrs’ leadership team (but no mention of staff members) remaining in place to continue to grow the UK business and deliver on Republic’s European expansion plans.
The deal also includes participation from Davidson Kempner Capital Management LP, who will become a shareholder in Republic through their acquisition of Seedrs shares from Schroder UK Public Private Trust plc, Augmentum Fintech, and Omnis Income & Growth Fund in November of this year. In total, this gives Davidson Kempner an aggregate of an approximately 30% stake in Seedrs.
“Seedrs’ ambition has always been to build a global private equity marketplace. This transaction is a natural development of our partnership with Republic to achieve and go beyond that ambition,” commented Kelisky. “We share a similar culture, a common goal, and a commitment to the strategic opportunities that lie ahead. We have great admiration for the teams at Republic, and together we can accelerate our plans to create a powerful global private investment marketplace that will transform the finance ecosystem and the communities they serve.”
Subject to the traditional regulatory approvals, the deal is expected to finalise in early 2022. Republic will accomplish the acquisition through a buy out all of the outstanding share capital, with shareholders and optionholders receiving a “core consideration” of approximately £23.59 per Seedrs share. Most shareholders and option holders will receive this in cash, but some will receive Republic shares or a combination of the two. In addition to the core consideration, a “carry” fee will also be charged out of the transation and paid to existing Seedrs shareholders and option holders as it crystallizes in the future.