26th Sep 2024 15:24
(Alliance News) - Visa Inc on Thursday announced it has agreed to acquire a developer of artificial intelligence payments protection technology for an undisclosed sum, providing a boost to London-listed investors.
The California-based payment card services company said it will acquire Featurespace, which was founded within Cambridge University's engineering department in the UK in 2008.
Featurespace's technology is used by 80 direct customers and 100,000 businesses to help protect against fraud and financial crime.
"Featurespace has developed innovative algorithmic-based solutions to analyze transaction data and detect even the most elusive fraud cases," Visa explained. The acquisition will add to its offering of fraud detection and risk-scoring solutions, the company added.
Shares in Visa were up 1.2% at USD272.54 each in New York on Monday morning.
Featurespace was backed by Mike Lynch, a British technology entrepreneur who recently died during the sinking of the Bayesian superyacht. Lynch had served as non-executive director from 2008 until 2019, and had personally invested into Featurespace.
Two of Featurespace's London-listed investors celebrated the update.
IP Group PLC, which invests in breakthrough science and innovation companies, said it will receive GBP134 million cash for its holding in Featurespace. Currently Featurespace's largest shareholder, IP Group was also its first institutional investor back in 2012, and has invested GBP22.9 million over seven financing rounds.
IP Group will be paid GBP119 million upon completion, with GBP15 million subject to deferral. The price is a GBP51 million uplift to its net asset value compared to financial 2023.
"Having supported Featurespace for over ten years, we are delighted with this record exit, which represents an excellent financial return for IP Group," said IP Group Chief Executive Greg Smith.
Shares in IP Group jumped 7.1% to 50.33 pence each in London on Thursday afternoon.
Chrysalis Investments Ltd also noted the transaction. The investor focused on disruptive businesses first invested GBP20 million in Featurespace back in 2020, before raising its stake the following year by GBP4.5 million, and injecting follow-on capital of GBP5 million in 2022.
Chrysalis expects to receive GBP89 million from the deal in total, with the initial consideration to be GBP79 million. This marks a 20% premium to the carrying value of its stake as at June 30; equivalent to a net asset value per share uplift of 2.5p. It represents a money multiple return of 3.0 times.
The sale will "transform the liquidity position of Chrysalis" once completed, said managing partners Nick Williamson and Richard Watts.
Separately, Chrysalis explained that after entering a GBP70 million loan facility with Barclays PLC, it has served a utilisation notice to draw the full amount. It expects the funds to be available to it next week.
Upon the receipt of the Featurespace proceeds and the loan, Chrysalis expects to have liquidity of around GBP195 million. Consequently, it will begin a share buyback for up to GBP100 million.
Shares in Chrysalis were up 5.6% at 91.83 each in London.
By Elizabeth Winter, Alliance News deputy news editor, Global services
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