OB10 News: Buyout, Bank Merger, IPO, and More

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The Financial Times had the scoop today in an article, Investment Vehicle Tungsten Looks to London Stock Market Float, that OB10 appears to be in the middle of a rather complicated combination of forces that, if successful, will “disrupt the supply chain finance market” through combining OB10’s assets with those of a bank and filing for an IPO, based on a direct quotation from one of the principals involved in the deal.

The article suggests that the company Tungsten “is set to file an intention to float on the London stock market as early as Wednesday after homing in on two separate takeover deals.” One of which is OB10. In addition, “the soon-to-be-listed vehicle is set to acquire the UK arm of First International Bank of Israel, which will give it a UK banking licence subject to regulatory approval.”

Adding yet another element to the deal, the FT also notes that “the remaining monies that shareholders invest in Tungsten will be used to provide capital to the new lender and fund an invoice analytics business.” The plot thickens.

We look forward to sharing more about the news as it becomes available. Our quick analysis suggests the following:

  • The transaction/IPO of this combined entity will bring even more attention to the market for supplier networks and vendor connectivity, building off of the strong attraction and buzz that SAP’s acquisition of Ariba created.
  • Procurement and A/P organizations that are current OB10 customers (or are potential customers) should invest the time to understand the current penetration of early payment discounting activities within their supply base – and to understand if the new offerings from a provider such as this could accelerate such efforts to reduce supply risk in their vendor base.
  • OB10 partners ranging from business process outsourcing (BPO) firms to specialist software providers (e.g., Taulia) will need to understand what is in this combination for them and how this activity could expand the relevant offerings for all sets of customers.
  • Additional supplier network providers (e.g., Hubwoo, IBX, Basware) are likely going to see their cache and value increase among investors/potential investors should Tungsten achieve a successful IPO.
  • The deal will put further pressure on Oracle to come up with a supplier network and enablement strategy beyond their Oracle Supplier Network (OSN) and Transcepta partnership. And no doubt Tungsten would like to take a call from Redwood Shores about a closer worker relationship!
  • If successful, the combination of e-invoicing, supplier network, and financing through a single entity is likely to drive much greater adoption of early payment discounting within a supply base than historic approaches have (for a variety of reasons that we’ll explore in the coming weeks on Spend Matters)

There are obviously many more elements to explore as more information about the transaction becomes available.

Disclosure: OB10 and Tungsten are clients of Spend Matters or Spend Matters affiliate companies. 

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