A Calgary company that grew to be a dominant force in automating small and mid-sized stock exchanges around the world has been purchased in a cash-share deal by a Toronto e-commerce company.
Basis100 Inc. has agreed to purchase EFA International for a combination of $6.4 million cash and 2.7 million shares of Basis100.
“Due to the recent market conditions, EFA became available as an acquisition for Basis100 with a value proposition that would not have been possible a year earlier,” said Basis100 CEO and president Gary Bartholomew.
Founded in 1985, EFA Software landed its first contract that year to begin the electronic automation of the Alberta Stock Exchange. By 1992, it had set up its first international stock exchange in Guatemala and had built or updated exchange systems in 36 countries across the world.
In an investor conference call on Friday, Bartholomew said the acquisition creates an international expansion platform for his company, which intends to obtain a significant share of the financial services marketplace worldwide over the next five years.
“We have a tremendous growth platform ahead of us,” he said.
“We want to ramp up the growth rate in this company beyond just the organic, and acquisitions are going to be a very key part of that.”
He added EFA is a “global player” with a healthy order backlog, which now will have the backing of a public company with a strong balance sheet.
“We are very excited about the opportunities this acquisition brings to both EFA and Basis100,” said David Ewasuik, chairman and CEO of EFA. “Basis100 understands the intricacies of trading technology and has the expertise to work with us to take our technology to the next level.”
Subject to regulatory approval, Ewasuik will join the Basis100 board of directors.
Basis100 also said it may issue up to 5.6 million additional shares, based on EFA achieving aggressive revenue and EBITDA performance targets over the next two fiscal years.
