Mogo Inc. (TSX: MOGO) announced today that it has entered into a binding letter of intent to acquire 100% of Canadian registered investment dealer Fortification Capital Inc. The acquisition is expected to bring “order execution only” registration capabilities to Mogo’s platform, a necessary requirement to offer stock trading to its members.
Mogo’s purchase is to consist of consideration that includes a cash payment of $500,000, a cash payment equal to Fortification Capital’s working capital less debt repayment which is estimated at $550,000, and 75,000 Mogo shares.
The company also plans to acquire the necessary licenses, registration, and technology to develop its planned commission-free stock trading solution, MogoTrade. It is expected to launch in 2021, and effectively be a competitor to WealthSimple.
Mogo CEO David Feller sees the acquisition as consistent with its goal “to build [Mogo as] the leading digital wealth platform in Canada, which will include zero-commission stock trading and a simple and intuitive modern user experience.”
Fortification Capital is expected to operate as a separate wholly-owned subsidiary from Mogo. The firm is a registered investment dealer as well as a member of IIROC. The acquisition is subject to regulatory approvals and customary closing conditions.
Mogo Inc. last traded at $8.97 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.