Vancouver-based Mogo Finance Technology and Difference Capital Financial announced last week that they have combined businesses. Under the agreement, Mogo joined with a wholly-owned subsidiary of Difference, which changed its name to “Mogo Inc.” prior to the execution of the agreement.
Following the merger, all shares of Mogo’s common stock (excluding those owned by Difference Capital) were exchanged one-for-one for common shares of the newly combined entity. Mogo shareholders own 80 percent of this newly-formed company with Difference Capital’s shareholders holding the remaining 20 percent.
For Mogo, this merger agreement will provide the fintech startup with the capital and resources necessary to expand its services and achieve its company goals of creating the premier Canadian fintech platform. The startup’s financial health app allows consumers to easily manage and control their finances via free accounts with services that include free credit monitoring, identity fraud protection and digital spending accounts.
According to the terms of the arrangement, Mogo will have immediate access to substantial cash reserves as well as Difference Capital’s investment portfolio, valued at approximately $24 million and comprised of a number of leading private Canadian technology companies.
Mogo’s founder and CEO David Feller expressed his hopes for the merger: “We are excited to finalize this transaction, which provides the company with additional resources to continue executing on our vision. Banking is changing, and the future will be dominated by a mobile-first app that makes it easy for consumers to be financially fit. Our team is focused on building out new products and new features to ensure Mogo remains the leader in this rapidly evolving landscape.”
Greg Feller, Mogo’s president and CFO, concurred: "The completion of the Arrangement will strengthen our financial position and represents a significant opportunity to build on our leadership in the Canadian fintech space and create value for shareholders of Mogo Inc. The overwhelming support for this transaction from Difference shareholders underscores the long-term growth potential of Mogo."
As part of the transaction terms, changes to the board of directors were also made. The board of directors for the newly-formed Mogo Inc. includes David Feller, Greg Feller, Michael Wekerle, Minhas Mohamed and Kees Van Winters.