NEW YORK, June 05, 2020 (GLOBE NEWSWIRE) -- Exxe Group, Inc. (OTC PINK: AXXA), a diversified company focused on synergistic acquisitions in digital platforms, financial services, real estate, and agribusiness, announced today that it has acquired a controlling interest in a fast-growing, UK-based fintech solutions provider that specializes in money-management platforms processing millions of transactions in alternative finance, merchant services, and investment services. The core product is FX Platform, which is projected to generate over $ 100 million in yearly transactions within 24 months and nearly $ 2,500,000 in EBIT. The deal is currently valued at a discounted price of $ 7.2 million. The total purchase consists of $1.8 in cash delivered on installment basis by 2022, preferred shares, assumption debt and personal guarantees of Exxe Group officers. Under current plan management intends to incubate the platform for 24 months, complete a PCAOB Audit and spin-off the unit delivering unparalleled value to Exxe Group’s shareholders as a result.
Background
According to a January 2020 industry report issued by Adroit Market Research, the global financial technology market (FinTech) is slated to reach nearly 500 billion dollars by 2025. As noted in the report, fintech companies integrate various technologies such as AI, Blockchain, Wallets, Forex (FX) trading, etc. into financial services to make them faster, safer, and more efficient. Europe appears to be ahead of most regional economies, which is why Exxe Group targeted the acquisition of a UK-based EU focused fintech company that is in the early stages of its growth phase. Adroit points out that the European market is ahead of other regions due to the strategic opportunity bolstered by the EU’s PSD2 payment directive (Payment Service Directive). PSD2 enables third parties to create new financial services through open APIs to customers' bank accounts, making app integration and execution seamless.
The evolution of fintech’s capabilities has fostered a boom in the FX trading industry. The introduction of new fintech platforms allowed the migration of FX trading dominated by large banking institutions to those adopted by smaller retail customers who use it as an investment or trading instrument. The adoption and broader usage have accelerated with increased demand for Forex products for savings, trading and investment, as well as hedging and risk management at the retail level.
Exxe Group already has a US division with the US-compliant connectivity intelligence. Adding a UK hub centrally positions Exxe Group to apply PSD2 expertise to launch multiple more fintech products ahead of its competition. Exxe’s leading role in the global fintech accelerated due to Covid-19 pandemic as the adoption of fintech solutions, which is Exxe’s expertise from the inception, poised to drive transformation confidently facing challenges and improving people’s daily lives.
The Platform
The platform currently executes various money-management services for specialized advisers/brokers who serve as retail FX trading aggregators, and each represent up to tens of thousands of retail clients. The brokers procure the platform to offer consumer-focused FX solutions to be used by their retail clients. Via this acquisition, Exxe Group inherits a huge underlying client base with which to onboard other services as well. Going forward, management plans to onboard more brokerage houses to offer FX services to their corresponding retail clients. The Company has targeted new client prospects of similar sizes, which could translate into as many as 100,000 customers. Given that the platform also generates fees for the broker as well as the Company, the current model fosters major growth in platform customers and fees. We expect the platform to process $5million (USD) in financial transactions during the 2nd Qtr (Jul-Sep 2020).
The Offerings
Exxe’s latest acquisition is no one-trick pony, with platform-based B2B and B2C applications across the spectrum, not limited to handling millions worth of FX transactions each month. Other services include fiat processing, conversion, online merchant-payment services, wallets, corporate billing, exchange and alternative finance integration and conversion, Forex hedging/arbitrage and money management, etc. In addition to the aforementioned services, the Company boasts a fintech development lab that is developing future, potentially broadly used applications. Current products under development include micro-lending, peer-to-peer lending, and new payment processing solutions. More details will be released upon completion of the company’s rebranding under Exxe in the upcoming months.
The acquired company features B2B and B2C services based on its multi-layered, innovative AI platform, which provides customers with a basket of applications for which they are charged a fee related to the value of the underlying processed or hedged transactions. These offerings are tailored for new-growth industries, much like that of the recent telemedicine acquisition, providing the opportunity to integrate payment processing including alternative forms of payment. Having this FX-solution in-house enables virtually unmatched leverage and fiat conversion for savvy Forex traders, investors, as well as end consumer applications.
Eduard Nazmiev, PhD, CEO of Exxe Group commented on the impact of the deal on the Company. “We are most excited to broadly expand our current fintech footprint market share-wise and certainly dramatically adds to our overall capabilities. Offering a popular product from which our broker clients can generate fees, and we in turn generate fees, fosters major revenue growth from huge retail client bases which are just increased as new firms are on-boarded. Looking ahead, we expect consistent, sequential growth in operating profit as more customers are added and new applications are introduced and executed.”
“Affirming that this acquisition has tremendous underlying value, an institutional player in the space that is a current customer has expressed interest in obtaining control. Thus, as we build out the business, offerings and its reach/market share to multiples of the current size, it is possible we sell controlling interest in the next 24 months at a sizable profit, while retaining a valuable minority position.”
About Exxe Group, Inc.
Exxe Group is a diversified corporation focusing on acquisitions in the following sectors: real estate, sustainable technology, media, agribusiness, and financial services. Exxe Group is an acquisition-driven company. The Company strategy is to acquire controlling equity interests in undervalued companies and undertake an active role in improving their performance - accelerating their growth by providing both access to capital and management expertise. For additional information go to www.exxegroup.com, twitter.com/exxegroup.
CONTACT: Exxe Group IR: info@exxegroup.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the following words: "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "should," "will," "would," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this press release.