Money Management Service Hank Set to Acquire Mortgage Firm

Money management platform Hank Payments announced Friday (March 11) it wants to acquire an unnamed mortgage payment platform provider.

According to a company news release, the mortgage provide has been operating in the Midwest for more than 20 years through a network of more than 1,500 brokers.

Hank, headquartered in Nova Scotia, Canada, has been processing payments for this company for more than a year and said it will benefit from “significant growth in all mortgage revenue and an increase in mortgage margin” now realized by the “Target,” or the mortgage company.

The deal is expected to close by April 15 of this year.

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“The first acquisition represents an important milestone for Hank since becoming a public company in late 2021,” said Jeff Guthrie, Hank’s president and COO. “The Target has built a wide-ranging network of mortgage brokers and has access to large scale originators that Hank will help unlock value from.”

Hank said it expects to enter into a definitive share purchase agreement with the mortgage company in the coming weeks.

The terms are: $624,000 in common shares at a price per share equal to the greater of $0.15 per share, or the closing price of Hank’s stock the day before the closing date of the acquisition.

The deal will also see the issuance of convertible notes with a term of four years in the aggregate principal amount of $624,000, bearing interest at 8% a year, payable quarterly.

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“The principal amount of the notes will be repaid quarterly commencing on the twelve-month anniversary in equal installments,” the company said. “The notes are convertible at a price per share equal to the greater of $0.25 per share or 10% premium to the closing price of Hank’s stock the day prior to the closing date of the acquisition.”