Digital payments giant Latitude (ASX:LFS)
unveiled its plans to buy the buy-now pay-later division of Humm (ASX:HUM)
for $335 million, largely made up of 150 million shares and $35 million of cash.
The duo have inked non-binding heads of agreement to allow Latitude to conduct due diligence an exclusive review at the Humm unit until the end of this month.
The proposed transaction “will cement Latitude’s position as the leading instalments and consumer lending business in Australia and New Zealand”.
Humm’s consumer business includes its Australia and New Zealand Instalments and Cards business which will provide additional scale to Latitude’s instalments business at minimal marginal cost.
Latitude will consolidate its LatitudePay BNPL business under the current brand and Q2 Cloud Lending platform of Humm’s consumer business. Q2 Cloud Lending is the platform used by Latitude’s lending business, recently acquired through the purchase of Symple Loans.
Should the deal go ahead, it is proposed that Humm group chief executive officer Rebecca James will be invited by Latitude to lead the combined group’s BNPL business, reporting to managing director and group chief executive officer Ahmed Fahour. Latitude intends to invite two Humm independent directors to join the Latitude Board.
The parties expect to sign definitive transaction documents by the end of this month subject to regulatory, shareholder and board approvals.
The duo aims to close the transaction before 30 June 2022.
Shares in Latitude (ASX:LFS)
are trading 1.8 per cent higher while while shares in Humm (ASX:HUM)
surging 6.2 per cent at 95 cents.