Digiliti Money rejects Urban FT offer
Digiliti Money in denial
Prospective buyer Urban FT, which first announced its desire to acquire mobile app technology company Digiliti Money (DGLT) on 16 August, reports that its revised offer for the company has been rebuffed.
DGLT has been silent since 14 August when it announced the delay of its second-quarter earnings report, pending an internal investigation and floating the potential for filing Chapter 11.
The only news from the company has been a few follow-up SEC filings related to staffing changes and the resignation of its accounting firm, Lurie LLP, which had flagged the company’s previous earnings reports.
The Nasdaq suspended trading of DGLT’s stock on 16 August, saying that it was requesting additional information from the Minneapolis-based company, which previously won awards for its remote deposit capture technology and Select Mobile Money platform.
Urban FT had swooped in with an offer to buy the struggling company, but those efforts so far have been fruitless. Following initial due diligence work, Urban FT submitted a revised offer which, if it had been accepted, valued DGLT at $10.5 million on a net equity basis, according to an announcement.
The offer also provided an immediate line of credit that would have enabled DGLT to meet all current and ongoing working capital requirements, including its upcoming payroll obligations due at the end of the month, Urban FT says. What’s more, the deal would have kept customer services running, all employees retained and all creditors receiving 100 cents on the dollar, according to New York-based Urban FT.
Urban FT CEO Richard Steggall told Paybefore earlier this month that DGLT was an attractive acquisition target for Urban FT because of is its “exceptional” client and strategic relationships. Urban FT is a digital banking technology company that said it could move Digiliti Money clients to its platform to cut costs, while also opening up opportunities for cross-selling its lifestyle app features to those clients.
Negotiations stalled, according to Urban FT, after the DGLT board, via its advisers, “proposed alternate terms and stood firm on those terms, which Urban FT and its attorney considered unreasonable and unacceptable under the circumstances”.
“The Digiliti business is fundamentally good one, with good staff, good technology and good clients,” says Urban FT President Kasey Kaplan. “We will leave our offer on the table for acceptance by Digiliti until close of business on 31 August.”
Neither DGLT nor its advisers at Lake Street Capital Markets responded to requests for comment at press time.
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