Peer-to-peer lender SocietyOne is selling to ASX-listed MoneyMe in $132 million deal

ASX-listed fintech MoneyMe is hoping to acquire one of the country’s original fintechs, SocietyOne in a deal worth $132 million.

Surprisingly, the merger does not deliver an immediate exit for several key backers of the peer-to-peer personal lending marketplace over the last decade.

Leading media companies including News Corp, Seven West Media, and Consolidated Press Holdings, as well as Australian Capital Equity, and Westpac’s VC fund, Reinventure, represent around 60% of the SocietyOne share register, and have all voluntarily agreed to escrow their holdings until MoneyMe’s 1H23 results in February 2023. They will hold between 18.3% and 18.7% of MoneyMe (ASX: MME) shares on issue at completion of the acquisition in March 2022.

Earlier this year, SocietyOne, joined Afterpay on Westpac’s digital banking services platform, 10X, and was expected to be working towards an ASX listing before the deal with MoneyMe was announced on Friday.

The Merger Implementation Agreement was signed this week. MoneyMe shareholders will vote to approve the merger at an Extraordinary General Meeting on February 1 with the deal scheduled to be completed on March 15.

The scrip-based acquisition is worth $132 million based on MoneyMe’s share price of $1.76 on December 16. A series of conditions need to be met for the merger to proceed, including at least 92.5% of SocietyOne shareholders accepting MoneyMe shares as consideration and a range of benchmarks around their value before the deal is sealed.

Shareholders representing 79% of SocietyOne’s book have signed the MIA and 78% have elected to receive the Scrip Consideration.

The merger will be a major boost for MoneyMe, which floated in December 2019 at $1.25 a share after raising $45 million. The shares popped on that opening day of trade to $1.72 – close to the price of the SocietyOne offer.

MoneyMe shares fell 1.42% of Friday as tech stocks continued their pre-Christmas fall to close at $1.735.

The merger with SocietyOne will bolster MoneyMe’s lending book by 72% to $934 million, upping annualised revenue by 63% to $146 million. The merger will also deliver more than $15 million in annual pre-tax revenue synergies.

MoneyMe CEO Clayton Howes said the deal delivers immediate scale advantages and incremental revenue opportunities, amid the company’s ambition to be the number one non-bank credit provider in Australia..

“The strategic value is immense for both businesses, and we are incredibly excited. The opportunity to accelerate growth and cost efficiencies are quickly realised by combining the strengths of both brands and migrating SocietyOne operations onto MoneyMe’s high-tech Horizon Technology Platform,” he said.

“The SocietyOne brand will continue to thrive and will benefit from access to MoneyMe’s diversified product set and ability to deliver leading customer experiences.

“There are many new innovations we will expand on, including the SocietyOne credit score product which will be brought to the MoneyMe customer base and the Banking-as-a-Service partnership with Westpac that we will continue to explore.”

If 100% of SocietyOne shareholders take scrip, they would own 30.5% of MoneyMe post transaction.