Eurowag exercises option to buy another 18pc of JITpay

Road transport payments and mobility platform specialist Eurowag has exercised its call option to acquire an additional 18.01% stake in JITpay, it announced on Tuesday.

The FTSE 250 company, officially called WAG Payment Solutions, described JITpay as a Germany-based payment service provider that specialises in digitalising billing, receivables management, and financing for the logistics sector.

It said the strategic partnership between Eurowag and JITpay was first established in September last year, when Eurowag acquired a 9.99% stake in JITpay for €14.3m.

Out of that amount, €3.5m was allocated as primary capital, and the agreement at the time included a call option for Eurowag to purchase an additional 18.01% share, which could be exercised until 3 July 2023.

The consideration for the new acquisition was €25.7m, with €6.5m designated as primary capital.

Eurowag said JITpay's software-as-a-service (SaaS) transport management product caters to small- and medium-sized transportation companies by facilitating prompt invoice payments and digitalizing the entire invoice management process.

That aligns with Eurowag's strategic objective of enhancing efficiency and improving access to capital within the commercial road transportation industry.

Through the investment, Eurowag said it would augment its platform capabilities by integrating industry-specific invoice discounting and billing management features.

JITpay operates in a number of European countries, including Germany, Poland, the Netherlands, Czechia, Slovakia, Slovenia, Lithuania, Latvia, and Spain.

“Under the option being exercised, Eurowag has agreed to acquire an additional 18.01% of JITpay's share capital from its founders, management and Volksbank eG Braunschweig Wolfsburg on a pro rate basis,” the board explained in its statement.

“The proceeds from the primary capital will be used to fund JITpay's further expansion.

“The remaining 72% stake will continue to be held by existing shareholders.”

Eurowag said there are call and put arrangements in place that give Eurowag the option to acquire the remaining 72% stake of JITpay's share capital from 2025 onwards.

“The price of the put or call payable by the group for the remainder of JITpay's share capital will be based on a multiple of 10x of the average of JITpay's profit before tax over the 12-month period to 31 December 2024 and 31 December 2025, with the put being subject to a cap of €129.3m.

“For the 12 months ended 31 December 2022, JITPay had net interest income of €1.7m and gross assets of €29.4m.

“The purchase of the additional 18.01% stake in JITpay will be funded from existing funds and the transaction is subject to customary closing conditions, including clearance by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), and is expected to complete in the first half of 2024.”

At 0826 BST, shares in WAG Payment Solutions were up 2.05% at 89.8p.

Reporting by Josh White for Sharecast.com.