Tungsten is to acquire OB10, a business-to-business (B2B) e-invoicing network, for GBP99m.
Tungsten has also signed a five-year rolling licence agreement with @UK PLC to deploy its analytic software technology to enable TungstenAnalytics to be delivered across Tungsten’s global e-invoicing network following the acquisition of OB10.
Tungsten intends, subject to regulatory approval, to acquire an identified duly authorised UK bank, whose assets solely comprise short term UK gilts and/or certificates of deposit to specialise in the provision of supply chain financing. It also intends to seek admission to trading on the AIM market of the London Stock Exchange (AIM).
Tungsten is also proposing to raise gross proceeds of up to GBP160m pursuant to a placing of new ordinary shares.
Completion of each of the acquisition of OB10, the placing and admission are all inter-conditional upon one another, such that none of these component parts can complete without the remaining parts also completing. It is expected that completion of the placing and the acquisition of OB10 will occur automatically upon admission. Completion of the acquisition of the bank is not, inter alia, conditional on admission nor completion of the acquisition of OB10.
Completion of the transaction will give more resources to OB10 to develop and deliver value added services, including spend analytic solutions, to the predominantly investment grade universe of buying organisations that are already clients of OB10’s leading global e-invoicing network. A key part of the strategy will be to deploy Tungsten’s financial services expertise to create an invoice financing capability through the bank and so give OB10’s customer base of suppliers the ability to accelerate payment of their receivables in a straightforward and cost-effective manner.
Edmund Truell, group chief executive of Tungsten, says: “We have an exciting opportunity to create a disruptive global player, by enhancing the offering of OB10’s leading global e-invoicing network which already serves a number of the world’s largest corporates and governments. In addition, we believe that TungstenAnalytics can provide considerable savings for buyers on the platform from which we would expect to benefit. The strategy for the Group to include a clean, duly authorised, UK bank into the middle of the flow of billions across the global network should provide suppliers with access to accelerated invoice settlement on a transparent and simple to execute basis. Tungsten thus aims to transform the financial aspects of the global supply chain.”
Luke McKeever, chief executive officer of OB10, says: “OB10 is a fast growing, private business that, since its inception in 2000, has developed into a leading and global player in electronic invoicing. The OB10 Board is committed to realising the long-term potential of the business by building the number one global trading network for its customers; the combination of OB10 with the enlarged Tungsten Corporation will help to fulfil that vision.
“OB10’s current services to its customers will be enhanced as part of Tungsten with the planned introduction of powerful payment and analytical solutions and the accelerated development of value added services. It is envisaged that the recently launched Express Payments service will be enhanced by access to banking capital. Further, the broader resources available from Tungsten will enable OB10 to continue its investment in innovative solution developments, enhanced service delivery and international expansion for our customers.”
