REG - Cornerstone FS PLC - Acquisition of Pangea FX Limited

Cornerstone FSAnnouncement

02/09/2022 07:00

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RNS Number : 0299Y  Cornerstone FS PLC  02 September 2022

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Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.

 

2 September 2022

 

Cornerstone FS plc

("Cornerstone" or the "Company" or the "Group")

 

Acquisition of Pangea FX Limited

 

Cornerstone FS plc (AIM: CSFS), the cloud-based provider of international
payment, currency risk management and electronic account services to SMEs, is
pleased to announce that is has entered into an agreement to acquire the
entire issued and to be issued share capital of Pangea FX Limited ("Pangea"),
a specialist FX and treasury consultancy (the "Acquisition"). The total
consideration payable for the Acquisition is up to £200,000 (dependent upon
future performance), which is to be satisfied by cash and loan notes.

 

Rationale for the Acquisition

 

Pangea FX is a specialist FX and treasury consultancy with a strategic focus
on helping its clients control the impact currency volatility has on their
business, primarily through providing a bespoke service to corporate clients
in the UK. Pangea FX was founded in 2017 by Joe Jones and Stuart Plummer who
each have over eight-years' experience in foreign exchange, particularly in
customer acquisition and sales positions. Prior to establishing Pangea FX, Joe
and Stuart worked at Vorto Trading Ltd, which is Cornerstone's largest white
label partner, alongside Robert O'Brien, who is now the Group's Chief
Operating Officer and General Manager APAC and Middle East.

 

The Board of Cornerstone believes that the Acquisition will accelerate the
Group's growth through the addition of two senior sales executives - namely,
Joe and Stuart - who will be responsible for leading the Group's sales
function. Joe will be based in the Group's London headquarters and Stuart will
be located in Dubai, where the Group opened an office in September 2021. The
Group will also benefit from the migration of Pangea FX's existing client base
to the Cornerstone platform as well as certain operational synergies such as
from closing the Pangea FX office and relocating the employees to the Group's
main office. As part of their future remuneration, Joe and Stuart will each be
granted 550,000 options in the Company's share option scheme.  These options
vest, assuming the relevant performance criteria are met, after two years at a
price of 10 pence per share.

 

Terms of the Acquisition

 

The consideration for the Acquisition consists of £25,000 in cash on
completion and up to £175,000 in loan notes (the "Loan Notes") with the
precise value being dependent on the acquired business' performance over a
two-year period. The Loan Notes, which have a term of two years, bear interest
at a rate of 6% that will be paid quarterly in arrears. Cornerstone may, at
its sole discretion, redeem the Loan Notes before the end of the two-year
period. In the year ended 31 March 2021, Pangea had revenue of £169,404, made
a profit before tax of £58,325 and had net assets of £20,011; these numbers
are all unaudited as Pangea is entitled to exemption from audit under Section
477 of the Companies Act 2006 due to its size.

 

Gareth Edwards, Chairman of Cornerstone, said: "We are pleased to have
completed this acquisition and welcome the Pangea FX team to Cornerstone. Joe
and Stuart have done an excellent job of building the Pangea FX business and
we look forward to benefitting from their skills and experience, both in the
UK and in Dubai. As we stated at the time of our fundraising, our intention
was to invest in our sales team to drive growth and we believe this is the
optimum means of achieving that as we also gain a book of business in the
short term, which we expect to be significantly expanded going forward. With
Joe and Stuart having worked with our team members in the past, we are
confident that they will be strong additions to Cornerstone and we look
forward to updating the market on their success."

 

 

Enquiries

 

 Cornerstone FS plc                       +44 (0)203 971 4865
 Gareth Edwards, Non-Executive Chairman

 Judy Happe, Chief Financial Officer

 SPARK Advisory Partners Limited (Nomad)  +44 (0)203 368 3550
 Mark Brady, Adam Dawes

 SP Angel Corporate Finance LLP (Broker)  +44 (0)203 470 0470
 Jeff Keating, Harry Davies-Ball

 Gracechurch Group (Financial PR)         +44 (0)203 488 7510
 Harry Chathli, Claire Norbury

 

 

About Cornerstone FS plc

 

Cornerstone FS plc is a payments focused fintech business that makes managing
currency simple for SMEs. It provides international payment, currency risk
management and electronic account services using a proprietary cloud-based
multi-currency payments platform. These services are delivered directly and
via white label partners on a SaaS basis to UK-based SMEs that engage in
international trade. Cornerstone also serves some high-net worth individual
clients.

 

Headquartered in the City of London with offices in Tunbridge Wells and Dubai,
Cornerstone is admitted to trading on AIM under the trading symbol 'CSFS'. For
more information, please visit www.cornerstonefs.com.

 

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