MONTVALE, N.J., Dec. 20, 2018 /PRNewswire/ -- Brookfield
Interactive (Hong Kong) Ltd,
ParagonEx Ltd. and MICT, Inc. (NASDAQCM: MICT) are pleased to
announce the signing of a definitive acquisition agreement to
pursue the strategic transactions and planned listing on NASDAQ
outlined in announcements by MICT and BNN on July 2, 2018.
Summary of the Proposed Transaction
The acquisitions will create a new company, Global Fintech
Holdings Ltd. (GFH), which will become the parent of these highly
complementary businesses with the opportunity to achieve
significant scale as a combined entity:
- ParagonEx is a leading developer and global provider of
software solutions and related services for online trading in
contracts-for-difference ("CFD") in over 500 different underlying
global financial instruments such as stocks, indices, commodities,
exchange-traded funds and foreign exchange. ParagonEx provides its
business-to-business (B2B) clients with a software platform for
trading in CFDs under a business model of 'Platform as a Service'
(PaaS). ParagonEx's trading platform is product-agnostic, capable
of handling high trading volumes and is highly synergistic with
Brookfield Interactive (HK)'s offering, and expected to enable it
to deliver its content and services in China and elsewhere on robust digital trading
platforms. ParagonEx generated EBITDA of $19.9 million in 2017 and $10.3 million of EBITDA in H1 2018 as well as
producing significant cash flow.1
- Brookfield Interactive (HK) brings to GFH, a technology,
content and services company with a focus on the Chinese lottery,
sports and gaming markets. Brookfield Interactive (HK)'s successful
history of executing its digital technology strategy in
China via long term trusted and
proven relationships with Chinese provincial lottery centers,
government regulated departments and major Chinese portals,
provides a well-established starting point for GFH, which will be
strengthened by the execution capabilities of the merged
companies.
- MICT, a Nasdaq listed company, through its majority owned
subsidiary Micronet Ltd., currently provides rugged mobile devices
for the growing commercial Mobile Resource Management (MRM) market.
MICT develops, manufactures and provides mobile computing platforms
for the mobile logistics management market in the U.S.,
Europe and Israel. American manufactured systems are
designed for outdoor and challenging work environments in trucking,
distribution, logistics, public safety and construction. As noted
below, MICT's interest in Micronet Ltd. is contemplated to be spun
off in connection with the transactions contemplated by the
acquisition agreement.
We believe combining these entities will create a company with a
strong business-to-business (B2B) technology platform and
operational expertise that will enable GFH to present a leading
global multifaceted platform for trading in digital assets. The
combination of these entities is expected to allow GFH to
capitalize on ParagonEx's technology and Brookfield Interactive
(HK)'s market relationships and technology, via a public market
vehicle with access to the capital markets, to become a leading
technology provider for the lottery, sports content and other
gaming verticals with a strong position in the Asian markets. The
strengths and competencies of GFH are expected to include:
- a premier trading platform in digital assets, offered as a
Platform as a Service ("PaaS"), that is product agnostic and can be
scaled into many different verticals;
- access to the Chinese market through Brookfield Interactive
(HK) to monetize the lotto, sports, gaming and other markets using
GFH's technology solutions; and
- potential to capitalize on its access to the financial markets
to acquire revenues of smaller players at attractive and accretive
acquisition multiples to address industry consolidation driven by
regulatory changes.
Key Terms of the Transaction
- GFH successfully raised $23.5
million at $1.65 per share to
fund the transaction (the "Financing").
- BNN Technology PLC, a 15% stockholder in MICT and majority
stockholder of Brookfield Interactive (HK), will commence a tender
offer to purchase up to 20% of the issued and outstanding shares of
MICT's common stock, not already owned by it within 15 business
days at a price of $1.65 per share,
in order to increase its ownership percentage of MICT to a maximum
of 35% (assuming full participation in the tender offer).
- MICT and GFH will complete a merger whereby MICT will become a
wholly-owned subsidiary of GFH.
- Brookfield Interactive (HK) shareholders will transfer to GFH
all of the issued and outstanding shares of Brookfield Interactive
(HK), resulting in Brookfield Interactive (HK) becoming a
wholly-owned subsidiary of GFH.
- ParagonEx's shareholders will transfer all of the issued and
outstanding shares of ParagonEx to GFH, resulting in ParagonEx
becoming a wholly-owned subsidiary of GFH.
- At or within sixty (60) days of the applicable record date, GFH
will spin off MICT's interest in Micronet Ltd., a partially owned
subsidiary traded on the Tel Aviv Stock Exchange under the ticker
MCRNL, to its shareholders who retain shares of MICT after the
tender offer.
In connection with the Acquisitions, at Closing, the parties
will receive the following approximate consideration:
- Investors in the GFH Financing (assuming a $25 million raise) – 15,151,515 ordinary shares
of GFH, representing approximately 8.83% of GFH
- MICT Shareholders (other than BNN's current ownership, and
assuming that no shares of MICT are sold in the tender offer) –
9,048,077 ordinary shares of GFH, representing approximately, 5.27%
of GFH
- Brookfield Interactive (HK) Shareholders – 58,898,810 ordinary
shares of GFH, representing approximately 34.37% of GFH
- ParagonEx Shareholders – (a) $25
million in cash, (b) a senior unsecured note in the
principal amount of $10 million and
(c) 86,382,373 ordinary shares of GFH, representing approximately
50.36% of GFH
- ParagonEx Founders – 2,000,000 ordinary shares of GFH,
representing approximately, 1.17% of GFH
All of the shares to be issued by GFH are valued at $1.65 per
share, representing a GFH equity valuation of approximately $283
million.
The Business of GFH
The merger is intended to create a strong B2B technology
platform with operational expertise that will enable GFH to present
a leading global multifaceted platform for trading in digital
assets. ParagonEx's and Brookfield Interactive (HK)'s assets and
technology are highly complementary and are expected to enable GFH
to monetize BNN's opportunities within China as well as expedite the growth plan of
ParagonEx globally. GFH believes future growth can be driven by the
combination and penetration of existing products and platforms into
new and emerging markets while capitalizing on revenue acquisition
opportunities in a consolidating market.
GFH's enhanced access to the financial markets, supported by a
NASDAQ listing, is anticipated to facilitate the acquisition, at
attractive and accretive acquisition multiples, of revenues streams
of smaller companies dependent on third party software providers,
as regulatory changes drive industry consolidation. These potential
acquisitions offer significant opportunities for operational cost
savings as a result of ParagonEx's highly scalable and robust PaaS
capability.
ParagonEx and Brookfield Interactive (HK) are already developing
new "play for fun" products to create new revenue streams for GFH.
These online games are expected to appeal to a different, yet
larger, segment of end users who are not financial traders, but who
wish to enjoy playing online financial trading games.
GFH intends to establish its base of operations in Hong Kong and believes that this will enable a
rapid rollout of its operations to service the South East Asia market. GFH intends to obtain
all licenses necessary to conduct the business and support the
operation of the group from Hong
Kong.
Commenting on the proposed transaction, Darren Mercer, Chief Executive Officer of
Brookfield Interactive (HK), said:
"We are extremely excited to have agreed on a
combination of these highly complementary companies. Together they
provide an underlying business that can be very profitable,
boasting a world class technology platform with big data analytical
capability, a management team with decades of experience building
highly profitable technology companies and an opportunity to
monetize a number of significant commercial relationships in
Asia. The blend of these companies
enables the combined entity to benefit from the specialisms in
which each element excels and allows us to view the future with
considerable confidence. I am particularly pleased to see this
echoed by the support of investors in the Financing which has
raised $23.5 million."
David Lucatz, Chairman, Chief Executive Officer and President of
MICT, added:
"This transaction marks a significant milestone in the evolution
of MICT. The merged company will develop a much more substantial
and diverse revenue stream than has been possible during our solid
progress over the last 10 years. It is a game changer for us,
providing the opportunity to generate significant value for our
shareholders, who will be encouraged by the support for the
financing at $1.65 per share.
Looking ahead, this compelling merger of our three companies
positions GFH well to leverage its proprietary technology, capital
raising ability and Asian experience in addressing a number of
fast-growing business segments."
Simon Duggan, CEO of
ParagonEx, said:
"We are delighted to take part in an exciting combination that
accelerates our expansion. For more than 10 years our team has
delivered linear year-on-year profits growth. This performance has
been supported by strong technology in which more than $45 million has been re-invested to date. This
transaction will support our new revenue acquisition program, and
the deployment of our platform in new directions, commencing
with the execution of key BNN commercial relationships in
China. I strongly believe that
combining with MICT's capital markets experience in the US and
BNN's access to Chinese consumer and business markets is an
exciting opportunity to fast-track further adoption of ParagonEx's
technology in the global market."
Transaction Advisors
Maxim Group LLC acted as sole financial advisor to Brookfield
Interactive (HK ) and BNN Technology PLC in connection with the
proposed Merger.
Herzog Fox & Neeman are acting as legal counsel to ParagonEx
Ltd in connection with the transactions contemplated by the merger
agreement.
CoView Capital, a Manhattan-based investment bank focused on
mergers and acquisitions, rendered the Fairness Opinion to the
Board of MICT. Mintz, Levin, Cohn, Ferris, Glovsky, and
Popeo, P.C. and Naschitz, Brandes, Amir & Co. are acting as
legal counsel to MICT in connection with the transactions
contemplated by the merger agreement.
Official filings with the US Securities and Exchange
Commission relating to this transaction may be found at
www.sec.gov
For further information, please contact:
Brookfield
Interactive (HK)
|
info@bnntechnology.com
|
+44(0) 1565 872
990
|
MICT, Inc.
|
info@mict-inc.com
|
+1 (201)
225-0190
|
Additional Information and Where to Find It
In connection with the proposed transactions described
herein, MICT, Global Fintech Holdings, ParagonEx and Brookfield
Interactive (HK) will prepare a proxy statement/prospectus for
MICT's stockholders and a registration statement on Form F-4 to be
filed with the Securities and Exchange Commission. MICT's
proxy statement/prospectus will be mailed to MICT's stockholders
that do not opt to receive the document electronically. MICT,
Global Fintech Holdings, ParagonEx and Brookfield Interactive (HK)
urge investors, stockholders and other interested persons to read,
when available, the proxy statement/prospectus, as well as other
documents filed with the SEC, because these documents will contain
important information.
Such persons can also read MICT's Annual Report on Form 10-K
for the fiscal year ended December 31,
2017, for a description of the security holdings of its
officers and directors and their respective interests as security
holders in the consummation of the transactions described herein.
MICT's definitive proxy statement/prospectus, which will also be
included in the registration statement, will be mailed to
stockholders of MICT as of a record date to be established for
voting on the transactions described in this report. MICT's
stockholders will also be able to obtain a copy of such documents,
without charge, by directing a request to: MICT, 28 West Grand
Avenue, Suite 3, Montvale NJ
07645. These documents, once available, can also be obtained,
without charge, at the Securities and Exchange Commission's web
site (http://www.sec.gov).
Participants in Solicitation
MICT and its directors and executive officers, may be deemed
to be participants in the solicitation of proxies for the special
meeting of MICT's stockholders to be held to approve the
transactions described in this press release. Information regarding
the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of MICT's stockholders in
connection with the proposed Transactions will be set forth in the
proxy statement/prospectus when it is filed with the SEC. You can
find information about MICT's executive officers and directors in
its Annual Report on Form 10-K, which was filed with the SEC on
April 13, 2018. You can obtain free
copies of these documents from MICT using the contact information
above.
Non-Solicitation
This press release is not a proxy statement or solicitation
of a proxy, consent or authorization with respect to any securities
or in respect of the proposed transaction and shall not constitute
an offer to sell or a solicitation of an offer to buy the
securities of MICT or Global Fintech Holdings, nor shall there be
any sale of any such securities in any state or jurisdiction in
which such offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of Section 10 of
the Securities Act of 1933, as amended.
Important Information about the Tender Offer
THE TENDER OFFER REFERRED TO IN THIS PRESS RELEASE HAS NOT
YET COMMENCED. THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES
ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR PURCHASE, OR THE
SOLICITATION OF TENDERS WITH RESPECT TO THE SHARES OF MICT.
NO OFFER, SOLICITATION, PURCHASE OR SALE WILL BE MADE IN ANY
JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION, PURCHASE OR SALE
WOULD BE UNLAWFUL. THE OFFER WILL BE MADE SOLELY PURSUANT TO
THE TENDER OFFERING DOCUMENTS. THESE DOCUMENTS WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TENDER OFFER AND SHAREHOLDERS ARE
STRONGLY ENCOURAGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE
OFFERING DOCUMENTS AND TO CONSULT THEIR INVESTMENT AND TAX ADVISORS
BEFORE MAKING ANY DECISION REGARDING THE TENDER OF THEIR
SHARES. TO COMMENCE THE TENDER OFFER, A TENDER OFFER
STATEMENT ON SCHEDULE TO (THE "TENDER OFFER STATEMENT") WILL BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). IN
ADDITION, FOLLOWING DEFINITIVE DOCUMENTATION, MICT INTENDS TO FILE
WITH THE SEC A SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE
14D-9 WITH RESPECT TO THE TENDER OFFER. THE TENDER OFFER
STATEMENT, INCLUDING THE OFFER TO PURCHASE, THE LETTER OF
TRANSMITTAL, AND OTHER RELATED MATERIALS, AND THE
SOLICITATION/RECOMMENDATION STATEMENT OF MICRONET ON SCHEDULE
14D-9, WILL ALSO BE AVAILABLE TO MICT'S STOCKHOLDERS AT NO CHARGE
ON THE SEC'S WEBSITE AT WWW.SEC.GOV.
Non-GAAP Financial Metrics:
The amounts set forth in this Press Release were calculated
in accordance with International Financial Reporting Standards
(IFRS). This Press Release includes non-GAAP and non-IFRS
financial measures for ParagonEx which do not conform to SEC
Regulation S-X in that it includes financial information (EBITDA)
not derived in accordance with US GAAP or IFRS. Accordingly, such
information and data will be adjusted and presented differently in
the F-4 and MICT's proxy statement to be filed with the SEC to
solicit shareholder approval of the proposed transaction. ParagonEx
believes that the presentation of non-GAAP/non-IFRS measures
provides information that is useful to investors as it and provides
an additional tool for investors to use in evaluating ongoing
operating results and trends ParagonEx. Investors should review
ParagonEx's audited and interim financial statements, which will be
presented in the F-4 and MICT's proxy statement to be filed with
the SEC, and not rely on any single financial measure to evaluate
their respective businesses. Other companies may calculate EBITDA
and other non-GAAP/non-IFRS measures differently, and therefore
PAragonEx's EBITDA and other non-GAAP/non-IFRS measures may not be
directly comparable to similarly titled measures of other
companies.
Safe Harbor Language
This press release includes "forward-looking statements"
within the meaning of U.S. federal securities laws. Words such as
"expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should,"
"believes," "predicts," "potential," "continue" and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements involve significant
risks and uncertainties that could cause the actual results to
differ materially from the expected results and, consequently, you
should not rely on these forward-looking statements as predictions
of future events. These forward-looking statements and factors that
may cause such differences include, without limitation, MICT,
Global Fintech Holdings, ParagonEx and Brookfield Interactive
(HK)'s expectations with respect to future performance, growth and
anticipated acquisitions; the anticipated financial impact of the
reverse merger; ability to recognize the anticipated benefits of
the reverse merger; costs related to the proposed reverse merger;
the satisfaction of the closing conditions to the reverse merger;
the timing of the completion of the merger; global economic
conditions; the price, terms and timing of the Tender Offer, the
timing and terms of the spinoff; geopolitical events and regulatory
changes; acts of piracy, political instability, terrorist or other
attacks, war or international hostilities; loss of key personnel;
difficulty managing planned growth properly; access to additional
financing; changes in tax laws; weather and natural disasters;
changing interpretations of generally accepted accounting
principles; inquiries and investigations and related litigation;
continued compliance with government regulations; and other risks
and uncertainties indicated from time to time in filings with the
SEC. The foregoing list of factors is not exclusive. Additional
information concerning these and other risk factors is contained in
MICT's most recent filings with the SEC and will be contained in
the proxy statement/prospectus to be filed as result of the
transactions described above. All subsequent written and oral
forward-looking statements concerning MICT, Global Fintech
Holdings, ParagonEx, Brookfield Interactive (HK) and BNN
Technology, the transactions described herein or other matters and
attributable to MICT, Global Fintech Holdings, ParagonEx,
Brookfield Interactive (HK) and BNN Technology, or any person
acting on their behalf are expressly qualified in their entirety by
the cautionary statements above. Readers are cautioned not to place
undue reliance upon any forward-looking statements, which speak
only as of the date made. None of MICT, Global Fintech Holdings,
ParagonEx, Brookfield Interactive (HK) and BNN Technology undertake
or accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement to reflect
any change in their expectations or any change in events,
conditions or circumstances on which any such statement is
based.
1 EBITDA represents the sum of net income/(loss),
interest and finance costs, interest income, depreciation and
amortization, exchange rate adjustment and, if any, income taxes
during the relevant period. Refer to the disclaimer language at the
end of this press release for more information regarding non-GAAP
financial measures.
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SOURCE MICT, Inc.