08:28 AM EDT, 05/17/2021 (MT Newswires) -- Mogo Inc. (MOGO.TO, MOGO), a digital payments and financial technology company, entered into a binding letter of intent to acquire Canadian investment dealer Fortification Capital Inc. as part of plans to provide stock trading services.
Mogo, which ticked down in U.S. premarket trading after closing about 10% on Friday, will acquire Fortification Capital for C$500,000 in cash, another $550,000 in cash representing the target company's working capital plus repayment of subordinated debt owed to the vendor, and 75,000 shares. Half of the shares will be issued to the vendor at closing subject to a six-month escrow, while the rest will be subject to a three-year escrow.
The acquisition would give Mogo order execution only registration capabilities, which are required for Mogo to offer stock trading to its members. The company said it would acquire the necessary requirements to accelerate the development of its planned stock trading solution, with the aim of launching it this year.
Fortification Capital is expected to continue to operate as a standalone wholly owned subsidiary following completion.
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