Stack BTC plans reverse buy of precious metals dealer Direct Bullion
(Alliance News) - Stack BTC PLC on Tuesday announced it entered into non-binding heads of terms for a reverse takeover.
The London-based investment firm, which aims to build a portfolio of "high-quality" and cash-generative businesses alongside a bitcoin treasury, said it proposed acquiring DB London Ltd, trading as Direct Bullion.
Direct Bullion is a London-based precious metals dealer which sells gold coins and bars directly to the public and to pension funds.
Stack BTC said the planned acquisition for up to GBP12 million would constitute a reverse takeover.
It would consist of cash, new equity and deferred equity consideration, with the share consideration to be issued at a minimum of 6 pence per share.
Stack BTC shares were flat at 6.00 pence each on Aquis in London on Tuesday afternoon.
The company said it represented the first execution of its mergers & acquisition strategy.
It said GBP3 million will be payable in cash on completion of the reverse takeover, with around GBP4 million to be satisfied via the issue of new ordinary shares, subject to a four-year lock-in.
Further, an earn-out of around GBP1 million would be payable in cash after the Direct Bullion's financial year ending January 31, 2027, subject to Direct Bullion achieving earnings before interest, tax, depreciation and amortisation of at least GBP2.5 million in each of years three, four, and five, calculated before the cost of bitcoin purchases.
Direct Bullion for the financial year ended January 31 this year reported an operating profit of GBP3.1 million, up sharply from GBP1.1 million a year prior. Pretax profit had risen to GBP2.9 million from GBP1.1 million, while revenue surged 79% to GBP52.1 million from GBP29.1 million.
Cost of sales increased 81% to GBP47.0 million from GBP25.9 million.
By Tom Budszus, Alliance News slot editor
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