AFRICA – African agri-tech company Tingo and financial services provider MICT have executed a definitive merger agreement to consolidate both operations across the African and Asian markets.
The merger is anticipated to create a US$900 million annual revenue and is also expected to spark a global expansion strategy.
The combined technology stack of both Tingo and MICT is expected to create one of the world’s leading fully integrated fintech platforms offering combined financial services, and payment services.
In addition, the merger will provide a comprehensive marketplace and an e-wallet, integrating the successful wealth management, share trading, and insurance offering capabilities of MICT, with the fintech and one-stop-shop marketplace capabilities of the Tingo platform.
Based on recent SEC filings, the combined cash balances of Tingo and MICT are expected to total more than US$200 million, which together with strong balance sheets, leaves the merged group well-positioned to take advantage of further growth opportunities and future potential strategic acquisitions.
Under the terms of the merger, which has been approved by the Boards of Directors of Tingo and MICT, Tingo will operate under a newly-formed subsidiary of MICT.
Tingo shareholders will receive new MICT common shares in an amount equal to approximately 77.5% of the combined company.
Current MICT shareholders will own approximately 22.5% on a fully diluted basis following the closing, with a combined estimated group value of US$4.09 billion.
The transaction is expected to close by the end of the third quarter of 2022, subject to the satisfaction of regulatory authorities; closing conditions, including approval by both companies’ shareholders; and completion of due diligence by both companies.
As a result of the merger, Dozy Mmobuosi will become Chief Executive Officer of MICT (to be rebranded as “Tingo Inc.”), and the executive officers of Tingo shall be appointed to similar positions within MICT.
Darren Mercer, the current CEO of MICT, will become the Executive Vice Chairman and Pacific-Asia Chief Executive Officer.
Tingo is the leading agri-fintech platform on the African Continent offering a proprietary technology platform connecting rural farming communities.
On a proforma basis, Tingo reported 2021 revenues and operating income for Tingo Mobile PLC (its wholly-owned subsidiary) of US$865.9 million and US$327.1 million, respectively, compared to 2020 revenues and operating income of US$585.3 million and US$201 million, respectively.
Tingo also reported, on a proforma basis, sustained strong growth of 48% in year-on-year revenues and 63% growth in year-on-year operating income.