Fintech

Mosaic to Be Acquired for $5.50 per Share in All Cash Transaction

Published

3 years ago

June 28, 2021

Calgary, Alberta–(Newsfile Corp. – June 28, 2021) – Mosaic Capital Corporation (TSXV: M) (TSXV: M.DB) (“Mosaic” or the “Company“) announced today that it has entered into an arrangement agreement (the “Arrangement“) with 2356340 Alberta Inc. (the “Purchaser“), a newly formed private company owned by an entity controlled by Fairfax Financial Holdings Limited and MCC Holdings Ltd. pursuant to which the Purchaser has agreed to acquire all of the outstanding common shares of Mosaic for $5.50 per share in cash (the “Transaction“) for a consolidated enterprise value (inclusive of debt) of approximately $277.3 million. At closing of the Transaction, Mosaic’s outstanding convertible unsecured subordinated debentures will be acquired for consideration of $1,000 plus accrued and unpaid interest for each $1,000 principal amount.

TRANSACTION HIGHLIGHTS

Premium to Market Price. The consideration to be paid pursuant to the Arrangement for each common share represents a 61.7% premium to the $3.40 closing price of the common shares on the TSX-V on June 25, 2021, the last trading day prior to the public announcement of the Arrangement, and a 65.9% premium to the 20-day volume-weighted average common share price on the TSX-V for the period ending June 25, 2021.
Cash Consideration and Immediate Liquidity. The consideration to be received by shareholders is payable entirely in cash, providing shareholders with certainty of value and immediate liquidity, and removes the risks associated with continued ownership of the common shares.
Historical Trading Information. Trading in the common shares has been subject to low volumes and infrequency of trades for the last several years, indicating that the ability of shareholders to realize the current trading price for their common shares is highly unlikely.
Special Committee. Mosaic’s board of directors (the “Board of Directors“) formed a special committee (the “Special Committee“) of non-management directors to provide oversight, guidance and specific instructions with respect to the negotiations involving the Arrangement. The members of the Special Committee unanimously concluded that $5.50 per common share is the highest price that the Purchaser was willing to pay to acquire the common shares.
Access to Capital and Public Markets. Given the large amount of obligations comprising Mosaic’s outstanding indebtedness, and ongoing lack of investor interest in diversified small capitalization companies, the Special Committee believes that Mosaic has limited ability to utilize the public equity markets, and any financings through such markets would be associated with a high cost of capital and significant dilution to existing shareholders. Therefore, the Special Committee does not believe that Mosaic’s limited access to the public equity markets justifies the cost of remaining a public company.
Lack of Alternative Transactions. From 2018 to 2020, Mosaic’s management sought to identify, without success, potential strategic and financial parties who may be interested in undertaking a business combination or significant financing with Mosaic. The Special Committee believes that the inability to attract interest from potential M&A and financing partners over that time period is indicative of the remote likelihood that other potential acquirers may emerge.
Ability to Respond to Superior Proposals. Notwithstanding the Special Committee’s determination regarding the remote likelihood of other potential acquirers emerging, Mosaic retains the ability, under the terms of the Arrangement, to consider and respond to unsolicited superior proposals, and to enter into any such superior proposal upon payment of a $1.8 million termination fee.
Reverse Termination Amount. The Purchaser is obligated to pay to Mosaic a reverse termination amount of $1.8 million in certain circumstances where there is a failure to consummate the Arrangement when required to do so under the terms of the Arrangement.
Support Agreements. Certain shareholders, who collectively beneficially own or exercise control over approximately 41.6% of Mosaic’s outstanding common shares, have entered into “hard” voting and support agreements pursuant to which they have agreed to vote their common shares in favour of the Arrangement.

William H. Smith, QC, Vice Chairman of Mosaic and Chair of the Special Committee, commented “After careful deliberation, we are pleased to unanimously recommend that our shareholders vote in favour of this transaction. We believe the value offered is attractive at this juncture in Mosaic’s history. Furthermore, given the unique challenges related to diversified small-cap public companies in Canada we believe that Mosaic’s underlying portfolio companies are better positioned for future success with Mosaic structured as a private company.”

TRANSACTION DETAILS

The Transaction will involve the Purchaser acquiring all of the common shares of Mosaic for $5.50 per share in cash. It will be implemented through a statutory plan of arrangement under the Business Corporations Act (Alberta).

Completion of the Transaction is subject to various conditions, including approval by shareholders at a special meeting, court and regulatory approvals and provision of financing by Mosaic’s lenders. It is currently expected to close in early August 2021.

It is a term of the plan of arrangement that all of Mosaic’s outstanding convertible unsecured subordinated debentures will be acquired for consideration of $1,000 plus accrued and unpaid interest for each $1,000 principal amount.

The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be filed on SEDAR at www.sedar.com. Mosaic will mail a management information circular and certain related documents to shareholders in connection with the special meeting to consider and vote on the Transaction, copies of which will also be filed on SEDAR at www.sedar.com.

MOSAIC BOARD OF DIRECTORS RECOMMENDATION AND FAIRNESS OPINION

The Board of Directors, after receiving the unanimous recommendation of the Special Committee and in consultation with its legal advisors, has unanimously determined that the Transaction is in the best interests of Mosaic and fair to shareholders and is recommending that shareholders vote in favour of the Transaction.

Evans & Evans, Inc. has provided a fairness opinion to the Special Committee and Board of Directors that based upon and subject to the assumptions and limitation described in its opinion, the consideration to be received by shareholders pursuant to the Transaction is fair, from a financial point of view, to the shareholders.

ADVISORS

Farris LLP is acting as legal counsel to the Special Committee and to the Company. Evans & Evans, Inc. has provided the Special Committee and the Board of Directors with a fairness opinion in respect of the Transaction. Fillmore Riley LLP is acting as legal counsel to the Purchaser and MCC Holdings Ltd. Torys LLP is acting as legal counsel to Fairfax Financial Holdings Limited. Osprey Capital Partners Inc. is acting as sole financial advisor to MCC Holdings Ltd.

ABOUT MOSAIC CAPITAL CORPORATION

Mosaic is a Canadian investment company that owns a portfolio of established businesses which span a diverse range of industries and geographies. Mosaic’s strategy is to create long-term value for its shareholders through accretive acquisitions, long-term portfolio ownership, sustained cash flows and organic portfolio growth. Mosaic achieves its objectives by maintaining financial discipline, acquiring businesses at attractive valuations, performing extensive acquisition due diligence, utilizing optimal transaction structuring and working closely with subsidiary businesses after acquisition.

ABOUT FAIRFAX FINANCIAL HOLDINGS LIMITED

Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and the associated investment management.

ABOUT MCC HOLDINGS LTD.

MCC Holdings Ltd. is a company controlled by Mark Yusishen. Mr. Yusishen is a Canadian businessman who owns, directly or indirectly, a number of private businesses throughout Canada and the United States.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as “forward-looking statements”) that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All information and statements in this news release which are not statements of historical fact may be forward-looking statements. The words “believe”, “expect”, “intend”, “estimate”, “anticipate”, “project”, “scheduled”, and similar expressions, as well as future or conditional verbs such as “will”, “should”, “would”, and “could” often identify forward-looking statements. In particular, forward-looking statements in this news release include, but are not limited to: the closing of the Transaction on the terms and timing set out herein or at all; management’s belief that Mosaic’s underlying portfolio companies are better positioned for future success with Mosaic structured as a private company; the inability of shareholders to realize the current market price owing to low trading volumes; the high cost of capital and significant dilution required for future equity raises; the payment of a reverse termination fee to Mosaic in certain circumstances or at all; the intention to implement the Transaction through a statutory plan of arrangement under the Business Corporations Act (Alberta) and the intention to mail a management information circular and certain related documents to shareholders in connection with the holding of a special meeting of common shareholders to consider and vote on the Transaction. Such statements or information are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements due to these statements being subject to a number of risks and uncertainties.

Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements involve assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions and other forward-looking statements will not occur. Some of the assumptions made by Mosaic, upon which such forward-looking statements are based include, but are not limited to: the closing of the Transaction on the terms set out herein; the expectations related to trading price and volumes of the common shares; the payment of the reverse termination fee to Mosaic in certain circumstances; and the receipt of requisite approvals and financing for the Transaction.

A number of factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, but not limited to: prevailing economic conditions; unexpected changes in the financial markets (including in the trading price of the securities of Mosaic); changes in the general economic and business conditions of one or more of Mosaic and its subsidiaries; any of the conditions to the Transaction not being satisfied; and Mosaic has incurred expenses in connection with the Transaction and will be required to pay for those expenses regardless of whether or not the Transaction closes. Should any of the risks or uncertainties facing Mosaic and its subsidiaries materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, activities or achievements could vary materially from those expressed or implied by any forward-looking statements contained in this news release. Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Mosaic and its subsidiaries are included in Mosaic’s annual information form for the year ended December 31, 2020, a copy of which is available under Mosaic’s profile on SEDAR (www.sedar.com).

Although Mosaic believes that the expectations represented by any forward-looking statements contained herein are reasonable based on the information available to it on the date of this news release, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. Any forward-looking statements herein contained are made as of the date of this news release and Mosaic does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.

FOR FURTHER INFORMATION PLEASE CONTACT:

Cam Deller
Vice President, Corporate Development
Mosaic Capital Corporation
400, 2424 – 4th Street SW
Calgary, AB T2S 2T4
T: (403) 930-6576
E: [email protected]

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/88858

Fintech

Fintech Pulse: A Daily Dive into Industry Innovations and Developments

Published

3 hours ago

November 26, 2024

Peter Tolan

fintech-pulse:-a-daily-dive-into-industry-innovations-and-developments

The financial technology sector continues to evolve at a rapid pace, offering innovations that disrupt traditional paradigms. Today’s briefing underscores fintech’s diverse growth avenues: from substantial venture capital plays and strategic partnerships to groundbreaking implementations in lending. Here’s a closer look at recent developments shaping the landscape.

Synapse’s Comeback and Andreessen Horowitz’s Strategic Bet

Source: Axios
Synapse, a financial infrastructure company previously embattled by controversy, is staging a remarkable comeback, backed by none other than venture capital heavyweight Andreessen Horowitz (a16z). With this new infusion of funds, Synapse aims to consolidate its position as a premier platform for building financial services tools.

This resurgence demonstrates the resilience of the fintech ecosystem, where innovation often prevails over turbulence. Synapse’s renewed vigor also signals that top-tier investors remain bullish on infrastructural solutions pivotal to the future of digital finance. Andreessen Horowitz’s participation not only validates Synapse’s model but also underscores the VC giant’s enduring interest in fintech infrastructure, even amid global economic uncertainties.

Analysis:
This partnership exemplifies the dynamism within fintech, highlighting the interplay of innovation, capital, and resilience. It also raises questions about the broader implications of giving second chances to firms with turbulent histories. While Synapse’s evolution could inspire others, it also places a spotlight on governance and accountability in high-growth sectors.

Israel’s Fintech Scene Gets a Boost with Investment in Finova Capital

Source: Calcalistech
Israeli fintech startup Finova Capital has raised an impressive $20 million in a funding round led by prominent institutional investors. This marks a significant milestone for the company as it seeks to expand its suite of financial solutions aimed at underserved markets.

Israel’s fintech ecosystem has long been recognized as a hub of innovation, and this latest investment only reinforces its global standing. Finova Capital’s focus on empowering smaller businesses and fostering financial inclusivity aligns with emerging trends where tech-driven solutions bridge critical gaps in financial services.

Analysis:
With this funding, Finova is poised to enhance its technological offerings while contributing to economic inclusion. However, the broader fintech industry will watch closely to see how the company leverages this capital amid increasing competition from regional and global players.

India’s Yubi Plans a Fundraising Push

Source: Bloomberg
Yubi, a prominent Indian fintech platform backed by Insight Partners, is reportedly preparing for a new fundraising round. Having already established itself as a leader in credit infrastructure, Yubi aims to bolster its offerings and expand its market footprint.

India’s fintech landscape is witnessing explosive growth, with platforms like Yubi playing a critical role in the credit ecosystem. Yubi’s planned fundraising reflects the broader appetite for scaling solutions that streamline credit access, particularly in emerging markets where traditional lending models often fall short.

Analysis:
This development highlights two key trends: the increasing reliance on credit platforms in high-growth economies and the strategic role of international investors like Insight Partners in driving fintech innovation. Yubi’s expansion plans could set a precedent for other regional fintech players seeking to scale amid global economic headwinds.

Provenir and Hastings Financial Services Win Global Recognition

Source: Business Wire
In a testament to the transformative power of digital lending solutions, Provenir and Hastings Financial Services have been jointly recognized for the Best Digital Lending Implementation at the IBSi Global Fintech Innovation Awards. This accolade underscores the success of their collaboration in modernizing the lending process through cutting-edge technology.

Provenir’s advanced decision-making platform and Hastings Financial Services’ lending expertise have delivered a solution that significantly enhances user experience, operational efficiency, and risk management. Such innovations highlight the increasing role of partnerships in advancing fintech’s digital transformation.

Analysis:
This recognition not only validates the efficacy of digital lending but also emphasizes the importance of partnerships in driving innovation. It signals to the industry that collaboration can be a powerful tool for staying ahead in a rapidly evolving marketplace.

Microf and Quantum Financial Technologies Forge New Alliances

Source: PR Newswire
Microf, a financial solutions provider, has announced a strategic partnership with Quantum Financial Technologies. This collaboration aims to expand lending solutions for contractors, providing streamlined access to capital for businesses in need of flexible financing options.

This partnership is a timely response to the growing demand for specialized financial products in niche markets. By leveraging Quantum’s technology, Microf can now offer more tailored solutions, particularly to contractors navigating complex financial requirements.

Analysis:
This development reflects a growing trend: the diversification of fintech offerings to serve specific market segments. As competition in mainstream fintech intensifies, targeting underserved niches could become a defining strategy for success.

Key Takeaways for the Fintech Ecosystem

Resilience in Fintech Funding: Despite economic uncertainties, venture capital continues to fuel innovative fintech players like Synapse and Finova Capital.
Regional Growth Stories: From Israel to India, fintech ecosystems are thriving, attracting global attention and investment.
Collaboration as a Catalyst: The success of partnerships like Provenir-Hastings and Microf-Quantum underscores the importance of strategic alliances.
The Power of Recognition: Awards like the IBSi Fintech Innovation Awards validate industry achievements, inspiring others to push the envelope.
Focus on Inclusion: Whether through credit platforms or lending solutions, fintech is playing a pivotal role in fostering financial inclusivity worldwide.

Looking Ahead: Challenges and Opportunities

The fintech sector’s journey is far from linear. Regulatory complexities, technological disruptions, and market volatility remain persistent challenges. However, as seen in today’s developments, the opportunities far outweigh the risks. By prioritizing innovation, collaboration, and inclusivity, fintech players can navigate the complexities of the global financial landscape.

This moment in fintech history is pivotal. It’s a time for bold decisions, strategic partnerships, and a commitment to bridging financial divides. As industry players rise to the occasion, the road ahead promises a future where technology and finance intertwine to empower individuals and businesses alike.

The post Fintech Pulse: A Daily Dive into Industry Innovations and Developments appeared first on News, Events, Advertising Options.

Fintech

Fintech Latvia Association Releases Fintech Pulse 2024: A Guide to Latvia’s Growing Fintech Hub

Published

1 day ago

November 25, 2024

Adrienn Sarkany

fintech-latvia-association-releases-fintech-pulse-2024:-a-guide-to-latvia’s-growing-fintech-hub

The Fintech Latvia Association has launched the latest edition of its annual publication, Fintech Pulse 2024, unveiling insights and resources that position Latvia as a thriving hub for European fintech.

Announced at this year’s Fintech Forum, the magazine is now available in digital format, offering a comprehensive guide for fintech professionals and entrepreneurs navigating the Latvian market and exploring its advantages.

This issue covers essential topics, from support tools provided by Latvijas Banka and newcomer roadmaps to Riga’s investor resources and fintech education opportunities. Readers will find the latest fintech news from Latvia, coverage of this year’s key industry events, and member insights on the future of fintech. The Fintech Landscape section provides a comprehensive overview of the Latvian fintech ecosystem.

Tina Lūse, Managing Director of Fintech Latvia Association, expressed excitement about the ecosystem’s growth: “We are excited to unveil the third annual edition of Fintech Pulse. This year has been pivotal for our ecosystem, and together with public sector stakeholders, we are enhancing financial inclusion, democratizing investments, and driving innovation throughout the sector. This is a testament to Latvia’s emergence as a fintech hub, establishing itself as an equal partner in innovation and support within the Baltic region.”

Minister of Finance Arvils Ašeradens highlighted Latvia’s fintech potential in the magazine, stating: “Latvia has already made strides in adapting its regulatory framework to support a stable financial system. Now, we encourage financial market players to invest in modern technologies to meet the growing demand for inclusive financial services and solidify Latvia’s position in the fintech landscape. We are confident that with the combined offer of the government, Latvijas Banka and Riga city, we are a great place to start your next scalable European FinTech!”

Minister of Economics Viktors Valainis expressed Latvia’s ambition in the magazine, stating: “Latvia wants to become a WEB 3.0. innovation hub and solidify itself as one of the leaders of a newly regulated EU crypto-asset market. We welcome international companies to choose Latvia, a flexible and fast-paced country, where you can obtain a MICA license in just 3 months. Open your office in Latvia, receive a MICA license and serve the whole EU market!”

The Fintech Latvia Association brings together fintech and non-banking financial service providers to represent their interests at both the national and international levels. It promotes sustainable development in Latvia’s financial sector by fostering reliable, responsible, and long-term industry practices that earn trust from consumers and regulatory authorities. The association is committed to supporting innovation and growth opportunities within the fintech landscape.

The post Fintech Latvia Association Releases Fintech Pulse 2024: A Guide to Latvia’s Growing Fintech Hub appeared first on News, Events, Advertising Options.

Fintech

Quantum Security and the Financial Sector: Paving the Way for a Resilient Future

Published

2 days ago

November 25, 2024

Zoltan Tundik

quantum-security-and-the-financial-sector:-paving-the-way-for-a-resilient-future

The World Economic Forum (WEF) has released a pivotal white paper in collaboration with the Financial Conduct Authority (FCA), titled “Quantum Security for the Financial Sector: Informing Global Regulatory Approaches”. This January 2024 publication underscores the urgent need for global cooperation as the financial sector transitions from a digital economy to a quantum economy, highlighting both the immense opportunities and cybersecurity challenges posed by quantum computing.

Quantum: A Double-Edged Sword for Finance

Quantum computing offers transformative benefits for the financial sector, such as accelerated portfolio optimization, enhanced fraud detection, and improved risk management. Yet, it simultaneously threatens the very foundation of cybersecurity. With quantum’s ability to break traditional encryption methods, sensitive data and financial transactions face significant risks. The white paper warns that such vulnerabilities could erode trust in the financial system and destabilize global markets.

The urgency to prepare is evident, with some quantum threats, such as “Harvest Now, Decrypt Later” attacks, already emerging. Governments and regulators, including the United States with its National Security Memorandum on Quantum (2022), have begun advocating for quantum security readiness by 2035. However, as noted in the paper, transitioning to a quantum-secure infrastructure is a monumental task requiring unprecedented coordination between regulators, industry leaders, and technology providers.

A Collaborative Framework: Four Guiding Principles

To address the complex challenges posed by quantum technologies, the WEF and FCA have proposed four guiding principles to inform global regulatory and industry approaches:

Reuse and Repurpose: Leverage existing regulatory frameworks and tools to address quantum risks, rather than creating entirely new systems.
Establish Non-Negotiables: Define baseline requirements for quantum security, ensuring consistency and interoperability across organizations and jurisdictions.
Increase Transparency: Foster open communication between regulators and industry players to share best practices, strategies, and knowledge.
Avoid Fragmentation: Prioritize global collaboration to harmonize regulatory efforts and avoid inconsistencies that could burden multinational organizations.

These principles aim to create a unified, forward-looking strategy that balances innovation with security.

A Four-Phase Roadmap for Quantum Security

The white paper introduces a phased roadmap to help the financial sector transition toward quantum security:

Prepare: Raise awareness of quantum risks, assess cryptographic infrastructure, and build internal capabilities.
Clarify: Formalize engagement between stakeholders, map current regulations, and model the cost and complexities of transitioning to quantum-safe systems.
Guide: Address regulatory gaps, translate technical standards into actionable frameworks, and develop industry-wide best practices.
Transition and Monitor: Implement cryptographic management modernization and adopt iterative, adaptable regulatory approaches to remain resilient in the quantum economy.

This roadmap emphasizes adaptability, encouraging stakeholders to continuously refine their strategies as quantum technologies evolve.

The Path Forward: Collaboration as a Catalyst

The transition to a quantum-secure financial sector is not merely a technological shift but a comprehensive rethinking of how industries and regulators approach cybersecurity. The interconnected nature of global finance means that collaboration between mature and emerging markets is crucial to avoid vulnerabilities that could undermine the entire system.

Regulators and financial institutions must act with urgency. As Sebastian Buckup, Head of Network and Partnerships at the World Economic Forum, notes in the report:
“The quantum economy era is fast approaching, and we need a global public-private approach to address the complexities it will introduce. We welcome this opportunity to collaborate with the FCA to chart the roadmap for a seamless and secure transition for the financial services sector.”

Similarly, Suman Ziaullah, Head of Technology, Resilience, and Cyber at the FCA, emphasizes:
“Quantum computing presents considerable opportunities but also threats. The financial sector relies heavily on encryption to protect sensitive information, the exposure of which could cause significant harm to consumers and markets. Addressing this requires a truly collaborative effort to transition to a quantum-secure future.”

Global Impact: Ensuring Resilience in an Evolving Landscape

As quantum technologies mature, they will redefine the landscape of cybersecurity. The financial sector, as one of the most sensitive and interconnected industries, must prioritize preparedness to ensure stability, protect consumers, and maintain trust.

The Quantum Security for the Financial Sector: Informing Global Regulatory Approaches white paper offers an essential foundation for continued dialogue and action. By adhering to the guiding principles and roadmap outlined in the report, stakeholders can navigate this transformation with foresight and cooperation.

The full report, published by the World Economic Forum, highlights the need for a unified global approach to quantum security, serving as a rallying call for industry and regulatory leaders alike.

Source: World Economic Forum, “Quantum Security for the Financial Sector: Informing Global Regulatory Approaches”, January 2024.

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