We communicate, in compliance with the provisions of Art. 157, §4, of Law 6,404/76 and CVM Instruction 358, the indirect acquisition of all quotas of Tree Solution S.A. (“Tree Solution”).
About the company
Tree Solution is one of the most traditional software providers for the financial system in Brazil, focusing on the exchange segment. During the last 12 months, ending on 30 Sep. 2020, the company presented gross revenues of R$ 8.1 million.
The acquisition of Tree Solution fulfills two important strategic goals: (i) to expand the product portfolio, adding a complementary exchange solution to control onshore and offshore operations; and (ii) to expand the customer portfolio, adding important players, such as several global banks with local operations. Therefore, the acquisition creates new cross-selling opportunities within the combined customer base.
It is worth mentioning that we see a favorable growth outlook for the exchange segment in Brazil due to regulatory and technological changes that may reduce entry barriers and expand the number of authorized institutions to operate in this market, in a similar movement to what has already occurred in the credit and payments segments.
About the transaction
The initial acquisition price will be R$ 13.3 million, consisting of (i) a cash installment of R$ 10.5 million paid on this date, and (i) an installment of R$ 2.8 million, to be paid in 5 annual installments of R$ 560 thousand. Therefore, the initial purchase price represents an EV / Sales multiple of 1.6x.
The final purchase price may be increased by R$ 4.2 million divided in 2 additional installments of up to R$ 2.1 million to be paid in 2022 and 2023, subject to the achievement of certain goals.
The signing of the Share Purchase Agreement was authorized by the Company’s Board of Directors, and the hypotheses covered by Article 256 of Law 6,404/76 were not verified.
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