NAGA Group AG, a prominent player in the financial technology sector, has revealed an exciting merger arrangement with Capex.com, a versatile online trading platform handling various asset classes.
Under this agreement, Octavian Patrascu, Capex.com’s Founder and CEO, will ascend to the position of CEO within the publicly-listed NAGA.
This strategic merger will involve Capex.com reverse merging into NAGA Group AG through a non-cash capital infusion, while Patrascu is set to inject $9 million personally into NAGA through a convertible bond.
The primary goal of this move is to forge a thriving fintech entity by amalgamating the user bases and core competencies of both organizations.
Together, NAGA and Capex.com currently command an impressive user base exceeding 1.5 million individuals across the globe and are charting a course for over $250 million in revenue over the next three years.
Remarkably, the recent financial results for H1 2023 from the German fintech revealed stellar performance, boasting earnings of €25.2 million, almost €5 million higher than previously projected.
In the upcoming year, the unified company anticipates generating nearly $90 million in revenue, with an EBITDA of $6 million.
Furthermore, the merger will yield immediate cost synergies, estimated to surpass $10 million annually, particularly in areas such as regulatory compliance, technology enhancement, and marketing.
Michael Miloans, NAGA’s CEO, commented on the strategic benefits of this union, highlighting the expanded footprint in terms of users, licenses, and technology, ultimately contributing to business scaling in both the medium and long term.
NAGA’s stock prices on the XETR (Xetra) trading platform experienced a notable upswing, climbing by 6.6% to reach €1.1 during Tuesday’s trading session.
The merger is anticipated to be finalized in Q2 2024, subject to customary approvals and conditions.
In his new role as Group CEO of NAGA, Patrascu expressed his confidence in the merger’s success, emphasizing the substantial synergies between NAGA and Capex.com.
This strategic move follows Capex.com’s earlier acquisition in July, when they took over WiredMarket’s client book to penetrate the Greek market.
The combined company foresees substantial growth in user numbers, revenue, and profits, targeting $90 million in revenue this year with $6.5 million in EBITDA.
Their cumulative trading volume is expected to reach approximately $300 billion in 2023.
With a consolidated user base surpassing 1.5 million customers across 100+ countries, the joint platform is on a rapid expansion trajectory, aiming to reach 5 million users by 2025.
Additionally, the merger equips them to operate in more than 50 countries thanks to a total of 8 licenses, including entry into high-growth markets like the Middle East and North Africa (MENA), where NAGA can introduce its innovative social trading tools.
As part of the agreement, Capex and its shareholders will inject $15 million into the combined enterprise, further enhancing NAGA’s capital strength and liquidity, alongside a loan repayment extension of $5 million until 2025.
The successful conclusion of the merger will hinge on the customary closing conditions, with regulatory approval being a key component.