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(Sharecast News) - Caledonian Holdings announced on Wednesday that it has agreed to acquire fintech platform Aspire Commerce Group for 1, in a deal that would also see the AIM-traded investor provide short-term funding to support the target's operations ahead of completion.
The proposed acquisition valued Aspire at an enterprise value of 9.49m and was conditional on change-of-control approval from the Financial Conduct Authority and shareholder backing for a change to Caledonian's investing policy, which currently prohibits it from owning majority stakes in portfolio companies.
To ensure Aspire could continue operating during the interim period, Caledonian said it had extended a working-capital loan of up to 0.6m, funded from existing resources.
An initial 0.3m tranche was advanced at signing, with a further 0.3m available at Caledonian's discretion within three months.
The loan carries a 10% annual interest rate and must be repaid within two years, on completion of the acquisition or upon default.
In return, Caledonian received nil-cost warrants to subscribe for 9.99% of Aspire's shares, which would lapse automatically upon completion or repayment.
Caledonian, formerly known as Vela Technologies, said it also entered into a deed of priority to govern creditor ranking during the funding period, ensuring its loan was senior to Aspire's existing unsecured obligations and protected from enforcement actions or cross-default consequences.
The board said the acquisition formed a central plank of its strategy to build an integrated, technology-led financial services group.
Aspire provides current accounts, business lending and foreign exchange services through a proprietary multi-asset ledger platform aimed at addressing the UK's 22bn trade finance gap.
The acquisition would give Caledonian an immediate regulated operating footprint and shorten development timelines for new products by avoiding repeated approval cycles.
Aspire reported minimal revenues of 36,057 and a pre-tax loss of almost 4m in 2024, and had net liabilities of 4.95m.
Its non-current liabilities of 9.49m were largely related to technology-platform development.
Caledonian said Aspire's lenders supported a post-completion restructuring that would halt interest accrual, postpone capital repayments for several years and introduce a long-dated schedule aligned with future cash flows.
Jim McColl, Caledonian's executive director, said the deal underpinned the group's growth ambitions.
"The proposed acquisition of Aspire aligns with our strategy to build a scalable technology-enabled financial-services group," he said.
"The interim funding ensures Aspire remains operationally stable ahead of completion and supports the platform we intend to develop."
Aspire chief executive Adam Rigler said the proposed tie-up would enable continued investment and expansion.
"Partnering with Caledonian marks an important step for Aspire," he commented.
"The working-capital support gives us the stability to continue serving customers during the transition period, while aligning us with a long-term strategic partner committed to expanding our platform and capabilities."
Subject to shareholder and regulatory approval, Caledonian said it expected to present a resolution to amend its investing policy at an upcoming general meeting.
At 1317 GMT, shares in Caledonian Holdings were up 20% at 0.01p.
Reporting by Josh White for Sharecast.com.