Private equity firm Sargon Capital has been given the green light to acquire Australian financial technology company Decimal Software for $5 million.
The Federal Court of Australia has approved Sargon’s purchase of the publicly listed company for $0.0141 for the entirely of its share portfolio, which totalled at nearly 316 million at the time of the bid.
The scheme implementation agreement was made effective on 14 December 2018 following its lodging with the Australian Securities and Investments Commission (ASIC).
Company CEO Damon Watkins, who took over leadership from Nic Pollock in March this year, said the company would now focus on completing the acquisition and would be removing itself from the Australian Securities Exchange on 31 December.
“I am particularly thankful to the Sargon team who have demonstrated a strong commitment and confidence in the Decimal business, and have at all times acted with a strong sense of integrity and purpose. We are looking forward to building on that strong purpose as we move through 2019 and beyond as part of a larger team.”
The software-as-a-service firm had previously entered into two loan agreements with Sargon, valued at $600,000 in total, which are due to be repaid by March next year.
Decimal Software’s primary product is a cloud-based automated digital advice platform aimed at helping financial service companies deliver automated advice.
At the end of the last financial year, the company saw its revenues dip to $1.8 million, down from $2.3 million in 2017. However, it managed to reduce its losses from $3.6 million in 2017 to $2.3 million this year.
In his address to shareholders, Watkins said the year had been “bittersweet” for Decimal owing to the Royal Commission investigation into Australia’s banks.
Although he said the commission provided Decimal with an opportunity to help banks understand “the best path forward for their digital advice strategies” he said the commission’s longevity meant clients were still “assess[ing] the regulatory implications” to “determine the best path”.
Founded in 2013, Sargon provides infrastructure and technology for fintech start-ups across in Australia, New Zealand and Hong Kong.
“During the past three years Sargon has made a number of strategic acquisitions to bolster our capability and scale in trustee and custodian services,” Sargon CEO Phillip Kingston said. “The Decimal acquisition is an important milestone in Sargon’s growth strategy, bringing new technology capability to our group."
Kingston is also the founder and managing director of GrowthOps.