BankMobile is one of the largest digital
banking platforms in the country with over 2 million accounts
BankMobile Management to Lead Combined
Company
MFAC has Binding Commitments for a $20 Million
Private Placement for the Business Combination
Transaction Enterprise Value of $140
Million
Investor Calls on Thursday August 6th: MFAC and
BankMobile Technologies at 2pm; Customers Bancorp at 4pm
BankMobile Technologies, a subsidiary of Customers Bank (NYSE:
CUBI), and one of America’s largest digital banking platforms, and
Megalith Financial Acquisition Corp (NYSE: MFAC) (“MFAC”), a
special purpose acquisition company, announced today that they have
entered into a definitive merger agreement. Upon closing of the
transaction, the combined company (the “Company”) will operate as
BM Technologies Inc. and expects to be listed on the NYSE. The
transaction reflects an enterprise value for the Company of $140
million. All BMT serviced deposits and loans will remain at
Customers Bank immediately after the closing of the transaction.
Upon the closing of the transaction, BM Technologies will be a
financial technology company bringing banks and business partners
together through its digital banking platform.
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the full release here:
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With over 2 million accounts, BankMobile Technology, Inc. (“BMT”
or “BankMobile”) is one of the largest digital banking platforms in
the country. Launched in January 2015, BankMobile’s mission has
been to provide a compliant, mobile-first banking experience that
is simple, affordable, and consumer-friendly. Named “Most
Innovative Bank” by LendIt in 2019, BankMobile’s B2B2C
Go-To-Market-Strategy leverages a multi-partner distribution model
to generate high volume, low cost, customer acquisitions.
Today, BankMobile provides its Banking-as-a-Service (“BaaS”)
platform to colleges and universities through BankMobile
Disbursements, which reaches approximately one in every three
college students in the country. Additionally, BankMobile recently
announced the execution of an agreement with Google to introduce
digital bank accounts, which will be available to its customers.
BankMobile has also expanded its White-Label strategy most recently
with T-Mobile for the launch of T-Mobile MONEY.
“We are thrilled to partner with MFAC to become a public
company. In an era when digital banking continues to expand, we
look forward to building our business over the coming years and
taking advantage of all strategic opportunities,” said BankMobile
CEO Luvleen Sidhu.
A.J. Dunklau, CEO of MFAC said, “There has been rapid growth of
digital banking platforms, or neobanks, as many customers search
for less burdensome access to banking services. We believe that
BankMobile’s approach to collaborate with distribution partners and
partner banks, positions it well to continue to grow as an
increasing number of non-banks are looking to offer financial
services to their existing customers. Accordingly, we believe that
the opportunity to bring BankMobile to the public markets as a
stand-alone company is highly attractive.”
BankMobile Highlights
- Opportunity to disrupt massive U.S. banking market
- Consumer preferences are changing rapidly, and banks are slow
to adapt
- Americans paid $34B in overdraft fees alone in 2017
- Non-Banks increasingly want to engage their customers via
financial services; however, the technical and regulatory
challenges are substantial
- B2B2C model delivers high-volume, low-cost customer
acquisitions
- By partnering with very large companies with established brand
equity and loyal customer bases, BankMobile is able to leverage its
technology and significantly reduce its customers acquisition costs
while providing substantial benefits to its business partners
- BankMobile’s customer acquisition cost today averages less than
$10 per new account
- Collaborations with industry leading companies
- Recently announced an execution of an agreement with Google to
introduce digital bank accounts built on BankMobile’s existing
infrastructure.
- Partnership with T-Mobile in offering T-Mobile MONEY
- Highly attractive distribution channel through market leading
position in higher education reaches one in every three college
students
- BankMobile provides its “Banking-as-a-Service” (BaaS) to
colleges and universities through its BankMobile Disbursements
business, which reaches more than five million students on 722
campuses nationwide
- Unique offering delivers a full-service digital banking
platform, connecting customers with a partner bank
- In addition to its omni-channel digital banking apps delivered
on a modern technology platform, BankMobile provides full-service
banking support and access to a bank partner
- The full-service digital banking platform includes back-office
support, state of the art mobile-first onboarding systems, deposit
operations, fraud management, and customer care
- Attractive financial profile
- Enterprise Value of $140 million at only 1.3x 2021E Revenues
and 1.0x 2022E Revenues
- Highly experienced and recognized management team and board
- Executive management team averages 24 years of industry
experience
- CEO, Luvleen Sidhu, graduate of Harvard University and Wharton
School and recognized as 2019 Fintech Woman of the Year by LendIt
Fintech
- Very experienced board of independent directors expected to be
named shortly
Transaction Summary
The business combination transaction reflects an enterprise
value for the Company of approximately $140 million. Customers Bank
is to receive approximately $97 million in consideration comprised
of cash, stock in the Company, and approximately $10 million in
value attributed to a new technology license with BMT, with the
total consideration subject to potential adjustment based on
certain factors described in the merger agreement for the business
combination (the “Merger Agreement”). In addition, at the closing,
Customers Bank may be repaid a portion of the $40 million debt owed
to it by BMT with the new Company assuming any unpaid debt. MFAC
has received binding commitments of approximately $20 million for a
common stock private placement, which commitments exceed the
minimum cash closing condition required by the Merger Agreement.
MFAC’s sponsor entity will forfeit the vast majority of its founder
shares at the closing of the Transactions. The cash component of
the consideration will be funded by a portion of MFAC’s cash in
trust as well as a private placement from institutional investors
and MFAC’s sponsor that will close concurrently with the closing of
the business combination, in addition to BankMobile’s cash on its
balance sheet in excess of an agreed upon cash reserve. The balance
of the consideration will consist of shares of common stock in the
combined Company, each to be valued at $10.38 per share. Customers
Bank is expected to remain the largest investor in the Company by
rolling over significant equity into the combined Company.
Customers Bank will be subject to a standard lock-up period, but
plans to reduce its ownership stake in BM Technologies gradually
after the closing of the transaction.
In light of the relationship between MFAC’s sponsor and certain
officers and directors of BankMobile’s ultimate parent entity
Customers Bankcorp Inc. (“CUBI”), both MFAC and CUBI appointed
special committees consisting of independent directors with full
access to counsel and financial advisors. The special committees of
each party reviewed this transaction and made unanimous
recommendations to their respective boards of directors for
approval.
The transaction is structured as a forward subsidiary merger,
whereby BankMobile will merge with a newly-formed subsidiary of
MFAC, with MFAC’s merger subsidiary continuing as the surviving
entity and a wholly-owned subsidiary of MFAC. At the closing of the
transaction, MFAC will change its name to BM Technologies.
The business combination and related equity financing (together,
the “Transactions”) are expected to close in the fourth quarter
2020, pending MFAC stockholder approval and regulatory
approval.
Advisors
Raymond James is acting as financial advisor to BankMobile and
Customers Bank. Nelson Mullins Riley and Scarborough and Stradley
Ronon Stevens & Young, LLP are acting as legal counsel to
Customers Bank.
Boenning and Scattergood is acting as financial advisor to
Customers Bancorp’s special committee and provided a fairness
opinion for the transaction to the special committee. Duane Morris
LLP is acting as independent counsel to Customers Bancorp’s special
committee.
Keefe, Bruyette, & Woods, - a Stifel Company is acting as
financial advisor and capital markets advisor to MFAC. Chardan is
also acting as a capital markets advisor to MFAC. Ellenoff Grossman
& Schole is acting as legal counsel to MFAC. Vantage Point
Advisors is acting as a financial advisor to MFAC’s special
committee and provided a fairness opinion for the transaction to
the special committee.
Investor Call Details
MFAC and BMT will provide more information relating to the
transaction on a pre-recorded investor call on Thursday, August 6
at 2:00 p.m. ET.
Date:
Thursday, August 6, 2020
Time:
2:00 PM EDT
Dial-in:
+1 (877) 770-3647
Participant Code:
59288071
Customers Bancorp will host a live investor call with Q&A on
Thursday, August 6 at 4:00 p.m. ET.
Date:
Thursday, August 6, 2020
Time:
4:00 PM EDT
Dial-in:
+1 (800) 357-9083
Participant Code:
303651
Please dial in at least 10 minutes before the start of the call
to ensure timely participation. A playback of the call will be
available beginning August 6, 2020 at 7:00 PM EDT until 7:00 PM EDT
on September 5, 2020. To listen, call within the United States
888-203-1112. Please use the replay passcode 7501016.
About BankMobile
Established in 2015, BankMobile Technologies is a division of
Customers Bank and is among the largest mobile-first banking
platforms in the U.S., offering checking and savings accounts,
personal loans and credit cards. BankMobile, named the “Most
Innovative Bank” by LendIt Fintech in 2019, provides an alternative
banking experience to the traditional model. It is focused on
technology, innovation, easy-to-use products and education with the
mission of being “customer-obsessed” and creating “customers for
life.” BankMobile employs a multi-partner distribution model, known
as “Banking-as-a-Service” (BaaS), that enables the company to
acquire customers at higher volumes and substantially lower expense
than traditional banks. Its efficient operating model enables it to
provide low-cost banking services to low/middle-income Americans
who have been left behind by the high-fee model of “traditional”
banks. Today, BankMobile Technologies provides its BaaS platform to
colleges and universities and currently serves over two million
account-holders at 722 campuses (covering one out of every three
students in the U.S.). BankMobile Technologies is operating as the
digital banking division of Customers Bank, which is a Federal
Reserve regulated and FDIC-insured commercial bank. BankMobile is a
technology company and is not a bank and does not provide banking
services. For more information, please visit:
www.bankmobile.com.
About Customers Bank
Customers Bancorp, Inc. is a bank holding company located in
West Reading, Pennsylvania engaged in banking and related
businesses through its bank subsidiary, Customers Bank. Customers
Bank is a community-based, full-service bank with assets of
approximately $17.9 billion at June 30, 2020. A member of the
Federal Reserve System with deposits insured by the Federal Deposit
Insurance Corporation, Customers Bank is an equal opportunity
lender that provides a range of banking services to small and
medium-sized businesses, professionals, individuals, and families
through offices in Pennsylvania, Illinois, New York, Rhode Island,
Massachusetts, New Hampshire and New Jersey. Committed to fostering
customer loyalty, Customers Bank uses a High Tech/High Touch
strategy that includes use of industry-leading technology to
provide customers better access to their money, as well as
Concierge Banking® by appointment at customers’ homes or offices 12
hours a day, seven days a week. Customers Bank offers a continually
expanding portfolio of loans to small businesses, multi-family
projects, mortgage companies and consumers. Customers Bancorp,
Inc.'s voting common shares are listed on the New York Stock
Exchange under the symbol CUBI. Additional information about
Customers Bancorp, Inc. can be found on its website,
http://www.customersbank.com.
About Megalith Financial Acquisition Corp
Megalith Financial Acquisition Corp. is a blank check company
incorporated in Delaware for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses, with a focus on the fintech or financial services
industries. MFAC consummated its initial public offering on the
NYSE in August 2018 and is listed under the symbol “MFAC”.
Forward Looking Statements
This press release contains, and certain oral statements made by
representatives of MFAC, BankMobile and CUBI and their respective
affiliates, from time to time may contain certain statements that
are not historical facts but are “forward-looking statements”
within the meaning of the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as “plan,”
“intend,” “anticipate,” “believe,” “expect,” “estimate,”
“forecast,” “target,” “project,” “predict,” “intend,” “plan” and
“outlook” and other similar expressions that predict or indicate
future events or trends or that are not statements of historical
matters. Such forward-looking statements include estimated
financial information, including forward-looking statements with
respect to revenues and earnings, as well as forward-looking
statements with respect to performance, strategies, prospects and
other aspects of the businesses of MFAC, CUBI, Customers Bank and
BankMobile, or the combined Company following completion of the
proposed Transactions, which are based on current expectations that
are subject to risks and uncertainties and are not predictions of
actual performance. A number of factors could cause actual results
or outcomes to differ materially from those indicated by such
forward-looking statements. These factors include, but are not
limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger
Agreement and the proposed Transactions; (2) the inability to
complete the transactions contemplated by the Merger Agreement due
to the failure to obtain approval of the stockholders of MFAC, any
required regulatory approvals, or other conditions to closing in
the Merger Agreement; (3) MFAC’s inability to meet the minimum cash
requirements of the Merger Agreement due to a failure to complete
the equity private placement or the amount of cash available
following any redemptions by MFAC’s public stockholders; (4) the
ability to meet NYSE listing standards following the consummation
of the Transactions; (5) the risk that the proposed transaction
disrupts current plans and operations of BankMobile as a result of
the announcement and consummation of the Transactions; (6) the
ability of CUBI and Customers Bank to recognize the anticipated
benefits of the proposed Transactions, which may be affected by,
among other things, competition, the ability of management to
operate the combined Company as a stand-alone public company, the
ability of the combined Company to grow and manage growth
profitably, maintain relationships with customers and suppliers and
retain its management and key employees, and the costs involved in
CUBI and Customers Bank continuing to provide certain services to
the combined Company; (7) costs related to the proposed
Transactions; (8) changes in applicable laws or regulations; (9)
the possibility that the combined Company may be adversely affected
by other economic, business, and/or competitive factors; and (10)
other risks and uncertainties indicated from time to time in other
documents filed or to be filed with the Securities and Exchange
Commission (“SEC”) by MFAC or CUBI. Readers are cautioned that the
foregoing factors are not exclusive, and neither such factors nor
any such forward-looking statement takes into account the impact of
any future events. All forward-looking statements and information
set forth herein are based on the current beliefs and assumptions
by management of each of MFAC, CUBI, Customers Bank and BMT as of
the date hereof and speak only as of the date they are made. Each
of MFAC, CUBI, Customers Bank and BMT disclaims any obligation to
update any forward-looking statement whether written or oral,
except as may be required under applicable law.
For a more complete discussion of the assumptions, risks and
uncertainties with respect to CUBI, you are encouraged to review
the filings CUBI makes with the SEC, including its most recent
annual report on Form 10-K for the year ended December 31, 2019,
subsequently filed quarterly reports on Form 10-Q and current
reports on Form 8-K, including any amendments thereto, that update
or provide information in addition to the information included in
those Form 10-K and Form 10-Q filings, if any. For a more complete
discussion of the assumptions, risks and uncertainties with respect
to MFAC, you are encouraged to review the filings MFAC makes with
the SEC, including its most recent annual report on Form 10-K for
the year ended December 31, 2019, subsequently filed quarterly
reports on Form 10-Q and current reports on Form 8-K, including any
amendments thereto, that update or provide information in addition
to the information included in those Form 10-K and Form 10-Q
filings, if any.
No Offer or Solicitation
This press release is for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities pursuant to the proposed transactions or
otherwise, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
No Assurances
There can be no assurance that the Transactions described herein
will be completed, nor can there be any assurance, if such
Transactions are completed, that the potential benefits of
combining the companies will be realized. The description of the
transactions contained herein is only a summary and is qualified in
its entirety by reference to the definitive agreements relating to
the Transactions, copies of which will be filed by MFAC with the
SEC as an exhibit to a Current Report on Form 8-K.
Important Information about the Transactions and Where to
Find It
In connection with the Transactions described herein, MFAC will
file relevant materials with the SEC, including a definitive proxy
statement for MFAC’s shareholders. Promptly after filing the
definitive proxy statement with the SEC, MFAC will mail the proxy
statement and a proxy card to each shareholder entitled to vote at
the special meeting relating to the Transactions. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS
IN CONNECTION WITH THE TRANSACTIONS THAT MFAC WILL FILE WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT MFAC, BANKMOBILE AND THE TRANSACTIONS. The
preliminary proxy statement, the definitive proxy statement and
other relevant materials in connection with the transactions (when
they become available), and any other documents filed by MFAC with
the SEC, may be obtained free of charge at the SEC’s website
(www.sec.gov) or by writing to Megalith Financial Acquisition Corp.
at 535 5th Avenue, 29th Floor, New York, New York 10017.
Participants in Solicitation
MFAC and BankMobile and their respective directors, executive
officers and employees and other persons may be deemed to be
participants in the solicitation of proxies from the holders of
MFAC common stock in respect of the proposed Transactions.
Information about MFAC’s directors and executive officers and their
ownership of MFAC’s common stock is set forth in MFAC’s Annual
Report on Form 10-K for the year ended December 31, 2019 filed with
the SEC, as modified or supplemented by any Form 3 or Form 4 filed
with the SEC since the date of such filing. Other information
regarding the interests of the participants in the proxy
solicitation will be included in the proxy statement pertaining to
the proposed Transactions when it becomes available. These
documents can be obtained free of charge from the sources indicated
above.
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version on businesswire.com: https://www.businesswire.com/news/home/20200806005590/en/
For Customers Bancorp investor and media inquiries, please
contact:
Customers Bancorp Bob Ramsey Director of Investor Relations,
Customers Bancorp rramsey@customersbank.com 484-926-7118
For Megalith Financial Acquisition Corp investor and media
inquiries, please contact:
Megalith Financial Acquisition Corp. A.J. Dunklau Chief
Executive Officer aj@megalithfinancial.com 212-235-0438
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