Openmarkets signs business combination agreement with Broad Capital Acquisition

Openmarkets Group and Broad Capital Acquisition Corp. entered into a definitive Agreement and Plan of Merger and Business Combination Agreement that upon closing will provide the opportunity for OMG to become a publicly traded company. The transaction is expected to be completed in the second quarter of 2023, subject to regulatory approvals and other customary closing conditions. As of the closing, the combined entity, OMGL Holdings Ltd, an Australian public company, is expected to be listed on the Nasdaq Capital Market. The transaction reflects an estimated proforma enterprise value for OMG of US$90 million, with another potential US$20 million in earnout over 2 years, and marks an important step in OMG’s overall growth and capital management strategy. Following a period of strategic realignment, the company’s capital-raising initiatives are focused on driving the company’s renewed growth agenda, exploring strategic M&A to drive revenue synergies through the expansion of product and market portfolios, and continuing to invest in the development of innovative technologies to connect fintech clients and investment professionals to domestic and international markets. As part of the transaction, OMG will retain its experienced management team, led by CEO Dan Jowett. The board of directors of the combined company will consist of seven directors, of whom two individuals will be designated by BRAC and of whom five individuals will be designated by OMG. Upon the closing of the transactions contemplated by the Merger Agreement, BRAC will be merged with a subsidiary of OMGL called OMGH Merger Sub Corp., a Delaware company and wholly owned subsidiary of OMGL with BRAC surviving the merger as a subsidiary of OMGL, after which BRAC will be liquidated and distribute its assets to OMGL. OMG’s shareholders will then contribute their shares in OMG to OMGL in exchange for newly-issued shares in OMGL, resulting in OMG becoming a direct wholly owned subsidiary of OMGL. Pursuant to the terms of the Merger Agreement, the consideration to be paid in newly issued ordinary shares of OMGL at a deemed price of $10.00 per share at the closing of the Business Combination to existing shareholders of OMG is to be based upon a calculation of a US$90 million base enterprise value, further adjusted for any cash and outstanding debt of OMG and other customary closing adjustments, with another US$20 million deposited with an independent escrow agent to support an agreed earnout structure. The Consideration excludes certain transaction costs, the net cash and debt of OMG as at closing and an estimate of the working capital adjustment described below. Out of the closing Consideration, shares having a deemed value of approximately US$16 million will be deposited with an independent escrow agent to support certain indemnifications given by OMG under the Transaction. The Business Combination has been approved by the boards of directors of each of BRAC and OMG and by the shareholders of OMG. The Business Combination will require the approval of the shareholders of BRAC and is subject to other customary closing conditions, including a definitive proxy statement on Schedule 14A of BRAC being filed with and cleared by the U.S. Securities and Exchange Commission. The transaction is expected to close in the second quarter of 2023.