The long-anticipated merger between embedded banking platform Railsr and payments firm Equals Group is set to proceed via a £283 million takeover deal.
A newly-formed entity known as BidCo, backed by a consortium that includes Railsr shareholders and private equity firms TowerBrook Funds and JC Flowers Funds, will offer Equals shareholders 140 pence per share—comprising 135 pence in cash along with a special dividend of five pence per share.
The agreement is expected to close in the second quarter of 2025 and reflects a 37% premium on Equals’ closing price as of October 31, 2023, concluding a prolonged negotiation process.
Last year, Railsr faced a fire sale to a consortium of investors to avoid a complete collapse, leading to the company being placed in administration under the new name, Embedded Finance. After stabilizing with £24 million in funding from D Squared Capital and Moneta Venture Capital, Railsr reached out to Equals Group in March regarding a merger.
Equals had been exploring its strategic options but did not secure a deal with Railsr for over six months. The consortium behind the acquisition believes that merging the strengths of Equals and Railsr in foreign exchange, payments, and banking services will enhance the competitiveness of both businesses.
Philip Hammond, former Chancellor of the Exchequer and current chairman of Railsr, stated, “Today’s announcement represents a major strategic step for Railsr at a pivotal moment in the development of the embedded finance market. We are creating a significant new player and, amid market fragmentation, we will be well-positioned to deliver enhanced services to our customers.”