NASDAQ traded Long Blockchain Corp (NASDAQ:LBCC) – formerly known as Long Island Iced Tea Corp. – has announced its planned merger with the parent company of FCA regulated FX broker Stater Global Markets.
However, the deal seems to revolve around the new passion of both companies – Blockchain technology.
Long Blockchain announced that it has entered into a letter-of-intent with parent company Stater Blockchain Limited, which now calls itself a technology company focused on developing and deploying globally scalable blockchain technology solutions in the financial markets. Stater’s wholly-owned subsidiary, Stater Global Markets, is a Financial Conduct Authority (FCA) regulated brokerage that facilitates market access across multiple instruments including spot FX, digital currency futures and contracts for difference (CFDs).
The letter-of-intent contemplates an all-stock transaction pursuant to which the company would form a wholly-owned subsidiary which would merge with and into Stater, with Stater surviving as a wholly-owned subsidiary of the company. It is anticipated that the company would remain listed on the Nasdaq Capital Markets following the closing of the transaction.
The companies did not give ‘exact’ details of the planned merger – such as how much LBCC stock the current shareholders and the ‘new’ Stater shareholders will end up holding after the planned merger. LBCC currently has a market value of about USD $45 million, such that if the deal is done roughly as a merger-of-equals, with each group holding 50% of the merged company shares post-deal, then the transaction would value Stater at $45 million. But again, that apparently has yet to be finalized.
If the company is able to reach an agreement with Stater and the transaction is consummated, it is expected to complement its recently announced agreement to acquire 1,000 Antminer S9 mining rigs and 1,000 APW3++ PSUs.
Philip Thomas, Chief Executive Officer of Long Blockchain, commented,
We are excited to announce this potential milestone event for the Company. Stater has been making investments to build its cryptocurrency platform and blockchain solutions, and we look forward to combining our efforts in this transformational partnership. Our ultimate goal is to build a portfolio of investments that touch multiple points in the blockchain ecosystem and this transaction would be an important step in that direction.
Ramy Soliman, Chief Executive Officer of Stater Blockchain, added,
This merger would truly be a transformational moment for our business. Stater Blockchain brings a number of different assets to the table and our collective business will be unique in the investor space. It gives a holistic value add for shareholders through accretive blockchain expertise and plans, as well as a regulated institutional brokerage through Stater Global Markets. This combination of fintech and brokerage is a really powerful value proposition and we look forward to working with Philip and his team to achieve a leading position in a dynamic new world.
Terms of the letter-of-intent between the Company and Stater have not been made public at this time. Completion of the transaction is subject to the negotiation of a definitive merger agreement between the parties (the “Merger Agreement”), satisfaction of the conditions negotiated therein and approval of the transaction by the Company’s stockholders. Accordingly, there can be no assurance that a Merger Agreement will be entered into or that the proposed merger with Stater will be consummated.
Assuming the Company and Stater enter into the Merger Agreement, the parties will look to seek stockholder approval from the Company’s stockholders in the second quarter of 2018, subject to SEC review of the proxy statement to be filed by the parties for the proposed transaction, and will look to close the transaction shortly thereafter.
As we noted above, Long Blockchain Corp. was formerly Long Island Iced Tea Corp. – and its wholly-owned subsidiary Long Island Brand Beverages, LLC still operates in the non-alcohol ready-to-drink segment of the beverage industry under its flagship brand ‘The Original Long Island Brand Iced Tea®’. Beyond iced tea, Long Blockchain is focused on developing and investing in globally scalable blockchain technology solutions. It is dedicated to becoming a significant participant in the evolution of blockchain technology that creates long term value for its shareholders and the global community by investing in and developing businesses that are “on-chain”. Blockchain technology is fundamentally changing the way people and businesses transact, and the company will strive to be at the forefront of this dynamic industry, actively pursuing opportunities.
Stater Blockchain states that it aims to be the global market leader in blockchain technology solutions for the financial markets. The organization focuses on developing and deploying innovative and scalable distributed ledger technology solutions for the financial services sector. Stater Blockchain owns Stater Global Markets, a UK-based FCA regulated prime-of-prime brokerage, which facilitates market access across multiple instruments including spot FX, digital currency futures and contracts for difference.