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Openmarkets has signed an agreement to merge with Nasdaq-listed special purpose acquisition company Lake Superior Acquisition Corp in a deal that would see the Sydney-based wealth and trading technology provider become a Nasdaq-listed company.
The companies have entered into a plan of merger and a business combination agreement. The transaction is expected to be completed in 2026. It remains subject to regulatory approvals, shareholder approvals and other closing conditions.
The terms of the deal represent an estimated enterprise value for Openmarkets of USD $300 million. The figure excludes earn-out shares that may be issued under the agreement.
Lake Superior Acquisition Corp trades on Nasdaq under the ticker LKSPU. It is a blank cheque company formed for a merger or business combination.
Nasdaq route
Openmarkets said the transaction would result in the newly combined Openmarkets Group becoming a Nasdaq-listed company on completion. The company said it will retain its current management team and business structure as part of the deal.
Openmarkets operates in brokerage services and wealth management software. It provides trade execution, clearing and settlement services. It also offers options, risk management and equity order management applications. The company sells wealth management software on a SaaS basis.
Its customer groups include financial technology providers, advice professionals such as dealer groups and private wealth advisers, and high-volume traders. Openmarkets has its headquarters in Sydney. It also has offices in Melbourne and Brisbane.
Digital assets
Openmarkets linked the proposed listing to a strategy that it said would expand its activities into decentralised finance, cryptocurrency trading and tokenisation of real-world assets. It also set out plans for the international expansion of its technology and services.
In its digital assets strategy, Openmarkets said it will start with the fractionalisation of real-world assets. It cited funds, real estate, private equity and private credit as examples.
The company also plans to integrate cryptocurrency trading into its existing trading technology platform. It said it has started building a set of local and global partnerships. It also said it is reviewing its regulatory authorisations.
Executive comments
Dan Jowett, Chief Executive Officer, Openmarkets Group, commented on the deal and the company's direction.
"This transaction will provide a myriad of benefits to Openmarkets as we pursue our open finance strategy, opening up new sources of capital and onboarding new, strategically-aligned investors whilst giving Openmarkets a US market presence," said Dan Jowett, Chief Executive Officer, Openmarkets Group.
Jowett also described how he sees market structure changing.
"Tomorrow's capital markets will be defined by the convergence of traditional and decentralised finance, and there's enormous commercial potential for trusted fintechs to invest in compliant and secure infrastructure solutions that bring tokenised assets into our traditional financial system. Openmarkets is ready to deliver on this opportunity," said Jowett.
Edward Cong Wang, Chief Executive Officer and Chairman, Lake Superior Acquisition Corp, said the SPAC had searched for a business combination partner before reaching the agreement with Openmarkets.
"The combination with Openmarkets is the culmination of an exhaustive search for a market leader poised for explosive global growth. Through this transaction, we are providing the public market platform necessary for them to accelerate their expansion into new geographies and further their ambition to build the future of open finance through DeFi," said Edward Cong Wang, Chief Executive Officer and Chairman, Lake Superior Acquisition Corp.
Next steps
Lake Superior and Openmarkets said the proposed transaction will go to the shareholders of both companies. The combined company intends to file a registration statement on Form F-4 with the US Securities and Exchange Commission. The filing will include a proxy statement and prospectus for Lake Superior's shareholders.
The companies said the process will follow the completion of the registration statement and its effectiveness, before shareholders vote on the proposed transaction.