Urban FT, an industry leading software as a service (SaaS)-based digital banking platform, has confirmed it is in advanced negotiations with Digiliti Money Group (DGLT) regarding a potential transaction to help DGLT avoid potential bankruptcy proceedings.
The two companies began discussions about the potential deal — and other possible opportunities that could benefit the mobile app technology firm’s shareholders, employees, suppliers and customers — after Urban FT submitted an unsolicited offer to DGLT’s board on August 15. Discussions between the two are ongoing, but there has so far been no commitment towards any type of transaction.
Urban FT had noted in a previous release the deal would allow Digiliti to “continue to serve its customers and stave off potential bankruptcy proceedings.” Other terms of the deal would see some of Digiliti’s holders converting common shares into Urban FT common shares. Funding would come through Morgan Stanley on behalf of Urban FT’s principal investor.
In a recent interview with PYMNTS’ Karen Webster, Urban FT CEO Richard Steggall gave some insights into the rationale behind the proposed acquisition, saying DGLT has “attained some good clients with their [Remote Deposit Capture] RDC Service, their Prepaid Program Management Services and their white label mobile applications. We are confident that, with our own offerings and using our platforms, we can deliver enhanced opportunities for their clients, expanded customer penetration and … reduce costs of revenues — thus having a material, positive impact on the gross margin.”
Urban FT is hopeful a transaction can be completed. It is expecting to present DGLT with a final and binding proposal covering the anticipated requirements of DGLT and its board of directors on or before August 29, 2017.
While the proposal is subject to ongoing due-diligence inquiries, Urban FT pointed out shares of DGLT closed on August 16 at $1.04. The company believes the market has determined a current value for DGLT that it is comfortable working toward when preparing its final proposal for consideration.