Equals to Acquire Open Banking Startup Roqqett for £2.25M

Roqqett has two open banking licenses, which Equals does not have.

The acquisition is now pending FCA's approval.

Equals (AIM: EQLS), a provider of payment solutions to SMEs, has entered into a conditional agreement for the Acquisition of Roqqett Limited, an open banking payments platform, for a total consideration of up to £2.25 million.

Announced on Monday, Equals agreed to acquire the entire issued and to be issued share capital of Roqqett. However, the deal is now subject to the approval of the Financial Conduct Authority (FCA).

Equals will make an initial £1 million cash payment for the acquisition consideration, followed by three deferred payments, one in cash of up to £0.25 million and two of £0.5 million, one in cash and the other by the issue of ordinary shares in Equals.

"Similar to the Equals Connect transaction announced in October, the transaction is made possible by the continued strong performance of the Group and our surplus cash balances," said Equals' CEO, Ian Strafford-Taylor.

Indeed, Equals' revenue jumped by 84 percent in the first half of 2022, whereas the net profit came in at £0.8 million, recovering from a loss of £1.2 million in a similar period of the previous year.

Roqqett closed 2021 with a pre-tax loss of £0.57 million and an asset of £0.2 million.

A Strategic Acquisition

Roqqett was established in 2019 by Glenn Smith, a former FX Derivatives executive at UBS and Barclays. The FCA has authorized the company as an Account Information Service Provider (AISP) and Payment Initiation Service Provider (PISP). These licenses allow the company to offer a full suite of open banking services, including taking payments and financial data access.

The acquisition agreement is strategic as Equals does not hold either an AISP incense or a PISP license.

"The platform, underlying technology, and licenses that we are acquiring fit well with our stated strategy of providing payments solutions to our B2B customer base," Strafford-Taylor added.

If materialized, the acquisition will allow Equals to offer full payment life cycle products for its corporate and enterprise customers by adding the B2B2B/C leg to the ultimate consumer. The potential features can significantly increase the offerings of Equals Money and Equals Solutions.

The Equals infrastructure will further enhance the Roqqett proposition on a stand-alone basis. Additionally, the data capabilities will allow Equals to make decisions using machine-learning technology.

Roqqett's CEO, Glenn Smith, added: "Roqqett has developed a unique checkout experience for the rapidly growing market in open banking payments. This offering is enhanced with the addition of Equal's capabilities in IBANs and their membership of the Faster Payments Scheme. The team at Roqqett is looking forward to working with Equals to maximise the potential for both platforms arising from this acquisition."