The investment company Arcane Crypto plans IPO through takeover

The company Arcane Crypto intends to go public by taking over the listed company Vertical Ventures in reverse. In order to finance this, the Swedish company wants to put billions of new shares on the market.

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IPO planned through acquisition

The Norwegian crypto investment company Arcane Crypto plans its IPO through a so-called “reverse takeover” of the Swedish company Vertical Ventures, the company announced in a press release. 

Vertical Ventures intends to take over Arcane for an enterprise value of almost $32.5 million (300 million Swedish kroner), which corresponds to approximately €28.5 million. Vertical Ventures is already trading on the alternative stock exchange NASDAQ First North, where Arcane is also planning its IPO. 

Despite the takeover by Vertical Ventures, Arcane is to become the majority shareholder with a 92.5 percent stake in the company and will also officially trade under its name. The large difference in the company shares is due to the inconsistent values of the two companies. For example, Vertical Ventures’ balance sheet for 2019 showed an asset value of approximately $225.000 (2.18 million kroner), which corresponds to approximately €200,000.

Share issue as a source of financing

The reverse takeover allows Arcane to avoid the complex process of an IPO. To finance it, Vertical Ventures intends to throw more than 6.6 billion new shares onto the market, each of which can be purchased at less than half a cent. 

In November 2019, Arcane appointed Eric Wall, who had previously headed the Cryptocurrencies and Blockchain division at Swedish financial services provider Cinnober, which is now part of NASDAQ, as the new CIO. 

Arcane’s CEO Torbjorn Bull Jenssen explained the acquisition by saying that, if the IPO is successful, the company will be able to reach a broader investor base and expand its growth and offering.

The final approval is still pending

However, before the takeover is completed, the shareholders must first confirm it, as CoinDesk reported. NASDAQ North must also approve the new corporate structure before the company can be listed on the stock exchange again. The takeover is expected to be completed in the second half of 2020, Arcane announced. 

The news about the takeover have been very well received on the market. Vertical Ventures shares have increased 53% since the market open on July 2nd.

Arcane develops and invests in projects that mediate between cryptocurrencies and digital assets. The company is currently based in Stockholm, London and Oslo and is engaged in cryptocurrency payment technology, crypto-electronic and digital asset liquidity provision and private and institutional crypto-fiat exchanges. The company also runs a research department, the news portal Kryptografen and a hedge fund.

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