Alpha Group agrees acquisition of multibank platform Cobase

Alpha Group International announced its intention to acquire 85% of Financial Transaction Services on Tuesday, which trades as the multibank connectivity platform Cobase.

The AIM-traded firm said the acquisition remained conditional on approval from the Dutch Central Bank.

It said the initial purchase consideration was set at €9.4m (£8m) in cash, with the remaining stake to be acquired based on performance between 2025 and 2028.

Alpha said Cobase, founded in 2017, provides cloud-based bank connectivity technology that simplifies the management of corporate banking relationships, accounts, and transactions through a single interface.

It said the innovation aids global businesses in streamlining operations, especially those working with multiple banking partners across the globe.

Without solutions like Cobase, corporations faced the complexity of managing several platforms and integrations, diminishing efficiency.

Cobase's platform could integrate with popular ERP solutions like Oracle Netsuite, Microsoft Dynamics, and SAP S4/HANA.

Unlike traditional treasury management systems (TMSs) that necessitate resource-heavy integrations, Alpha said Cobase offers a simple, software-based solution.

Notably, less than 10% of Alpha's clients use a traditional TMS, underlining the demand for Cobase's offering.

The enterprise, based in Amsterdam, employs around 30 people and boasts over 500 bank connections across 80 countries.

Cobase's revenue is drawn from software-as-a-service subscription fees, currently estimated at £2m annually.

The company registered significant growth of 50% over the last year, serving over 100 corporate groups worldwide.

Alpha said its acquisition of Cobase was grounded in the complementary nature of the two entities.

Data showed that 80% of Cobase's clients were within Alpha's target market, hinting at growth opportunities through shared expertise.

Cobase would maintain its brand identity, team, and management, but its technology would bolster Alpha's digital offerings.

The board said the collaboration was expected to improve client retention, attract new clientele, and provide Cobase with access to Alpha's global sales expertise.

“Whilst we have had plenty of opportunities to make acquisitions and external investments, we have very high expectations for ourselves and our investors,” said Alpha Group chief executive officer Morgan Tillbrook.

“The fact that after more than six years as a public company and after considering numerous acquisition opportunities, this is our first investment of this kind is ultimately a testament to the company that Cobase have built, and the strength of the alignment the company has with our business.

“I am delighted to welcome Jorge and his team to Alpha and have been incredibly impressed by the technology they have built.”

Tillbrook said he was “excited” by the opportunity to work to accelerate the growth of both businesses, and the strong mutual value it was set to bring to both of their client bases.

“Our strong cash generation has given us the opportunity to acquire this highly synergistic platform, and we will continue to analyse the market and review merger and acquisition opportunities within our wider capital allocation strategy.”

At 1045 BST, shares in Alpha Group International were up 0.94% at 2,140p.

Reporting by Josh White for Sharecast.com.