BIG Blockchain Intelligence Group (BIG), a developer and provider of blockchain and cryptocurrency solutions, today announced that it has entered into a definitive share purchase agreement with Netcoins Holdings Inc. whereby BIG will acquire all of the issued and outstanding shares of the vendor’s three subsidiary companies – Netcoins Inc., NTC Holdings Corp., and NTC Holdings USA Corp., referred to collectively as Netcoins.
Netcoins is in the business of developing software to make the purchase and sale of cryptocurrency easily accessible to the mass consumer and investor through brokerage services.
Netcoins completed over CAD $58 million in cryptocurrency transactions in 2018. It currently enables crypto transactions via over 171,000 retail locations globally, a self-serve crypto purchase portal and an institutional over-the-counter (OTC) trading desk.
In addition, upon launch of its Netcoins Custody software, it is poised to deliver institutional-level crypto custody to the Canadian marketplace through an existing agreement with BitGo Trust, the world’s largest processor of on-chain bitcoin transactions.
In line with BIG’s objective of bringing cryptocurrency mainstream, post-transaction the company will be a vertically integrated crypto company, focused on compliance, regulation, and trading. BIG’s “compliance first” strategy provides a distinct competitive edge when it comes to cost and readiness, over companies in the space that have either no or poor AML compliance.
“BIG’s sophisticated AML compliance and reporting suite will give the Netcoins’ transactional product offerings a marketplace edge while allowing our software and services to be marketed by Netcoin’s highly experienced team via their existing sales channels.”
Netcoins existing institutional OTC trading business will be enhanced by the integration of BIG’s BitRank Verified product offering and advanced reporting technology on the source of crypto transactions. Custody is a key component of institutional participation, which is foreseen to be pivotal to widespread adoption. BIG will be able to offer custody solutions within its forensic division, for engagements with law enforcement and the banking sector.
Netcoins also has established relationships with a wide range of exchanges, both as customers and service providers, all of which are high-value targets for BIG’s BitRank product. Leveraging the Netcoins sales and marketing teams, BIG plans to accelerate market adoption globally of BitRank, building out recurring revenue streams tied to each and every transaction verification.
“The Netcoins acquisition is a natural fit for us. Our clients will have a need for OTC trading, and both Netcoins and its clients can benefit from the compliance and analytics services BIG provides. Mark’s team, with their strong relationships and understanding of the crypto market, will open up new markets to BIG. We are looking forward to integrating, and working alongside, this new team.”
Upon completion of the transaction, the combined teams will have considerable depth and strength on an engineering level, as well as sales and marketing. Mark Binns, CEO of Netcoins, will step up to lead the Company. With over 20 years’ experience in founding and building technology companies, including SAAS-based software businesses, Mark is a Dean’s Honours graduate of the Ivey MBA program and a graduate of the Computer Science Honors program at Acadia University. He has led his companies to PROFIT HOT 50 and PROFIT HOT 100 awards and was nominated by the Dean of the Richard Ivey School of Business for the prestigious business award of Canada’s “Top 40 Under 40”.
In consideration for acquiring all of the issued and outstanding shares of Netcoins, and on the closing of the transaction, BIG will issue an aggregate 37,500,000 common shares to the vendor at a deemed price of $0.08 per Payment Share. The Vendor plans to distribute the Payment Shares to its shareholders on a pro-rata basis.
Completion of the transaction remains subject to certain closing conditions and obtaining all necessary approvals, including the approval of the Canadian Securities Exchange (CSE) and the approval of shareholders of the Vendor and other conditions which are customary for transactions of this nature.
The transaction will be completed pursuant to available exemptions under applicable legislation.
In parallel with the standard due diligence review of Netcoins and its operations, BIG has engaged PI Financial Corp. to provide an opinion as to the fairness, from a financial point of view, of the consideration to be paid by BIG in respect of the transaction. PI Financial will receive total cash payments of $75,000 and aggregate 312,500 compensation options. Each compensation option shall entitle PI Financial to acquire one common share at an exercise price of $0.08 per share for a period of two years from the closing of the transaction, subject to an acceleration clause whereby if the 10 day weighted average share price on the CSE equals or exceeds $0.25 BIG can elect to change the expiration date of the compensation options to 30 days from the date of provision of formal notice to PI Financial of the triggering of the acceleration.
Further, in connection with the signing of the deal, BIG has entered into a finder’s fee agreement which provides for a cash fee payable of $90,000 on the closing of the transaction to Hillcrest Merchant Partners Inc.
Closing of the proposed transaction is expected to be on or about July 8, 2019.
