“Shareholders of both companies will benefit from improved financial flexibility.”
The transaction is still subject to Mogo shareholder and regulatory approval but is expected to close in the second quarter of this year. Upon completion of the transaction, former Mogo shareholders will own approximately 80 percent of the newly-merged company. The newly merged organization will continue to work on Mogo’s vision of building its FinTech platform.
Difference Capital Financial, a Toronto-based, publicly listed finance company, was established in 2012 to invest in late-stage private growth companies with a primary focus on technology, media, and healthcare. Mogo offers personal loans, identity fraud protection, mortgages, a Visa debit card, and credit scores, targeting a millennial audience.
“This transaction enables Mogo to continue to invest in new products and innovation, building on our leadership position in the Canadian FinTech space,” said David Feller, Mogo’s founder and CEO. “We are excited by the opportunity that the Transaction presents for shareholders of Mogo and Difference and are very pleased to have the support of the Difference board. We look forward to working closely with the leadership team at Difference to complete the Transaction.”
The merger will grant Mogo access to about $9 to $10 million in cash, which reflects proceeds from Difference’s two recently announced monetizations. Mogo CEO, Dave Feller, will act as chairman and CEO of the new organization, and Greg Feller will act as president, CFO, and director.
Mogo will have control of Difference’s portfolio of investments in some of the premier private technology companies in Canada, including Hootsuite and Vision Critical, which collectively have an estimated fair market value of $24 million.
“The merger with Difference strengthens our financial position and represents a significant opportunity to create value for shareholders of the combined entity,” said Greg Feller. “Difference has invested in many of Canada’s leading technology companies and Mogo has built a valuable distribution platform. Shareholders of both companies will benefit from improved financial flexibility as we execute on our strategy of partnering to bring best-in-class products to our more than 800,000 members.”
Image courtesy Mogo.