Safe Harbor Agrees to Buy Fintech Platform Abaca for $30 Million
Cannabis financier Safe Harbor Financial (Nasdaq: SHFS) has agreed to buy Arkansas-based fintech platform Rockview Digital Solutions Inc., doing business as Abaca, for $30 million.
According to the agreement, Safe Harbor will combine its financial services and Abaca’s fintech and payments solutions to “create comprehensive and streamlined banking solutions for cannabis operators.” The two-year deal consists of $3 million in cash at closing and $8.4 million in common stock.
Closing the acquisition could add more than 300 accounts and expanded financial institution relationships.
“With their cannabis banking and finance platform ecosystem, proprietary technology, strong financial institution and banking relationships, and experienced founder-led management team, we believe Abaca is the ideal platform to help us take a major step forward in scaling our capabilities and service offerings in building the complete cannabis fintech ecosystem,” said Safe Harbor Founder and CEO Sundie Seefried.
The new Safe Harbor fintech platform will offer desktop and mobile banking services, treasury management, payment processing, cash handling, logistics and a new payroll service to be launched later this quarter. In addition, the acquisition will increase the leadership talent of experienced cannabis fintech leaders.
Abaca co-founder and CEO Dan Roda will become executive vice president and COO of Safe Harbor. The company stated that Roda is a cannabis regulatory expert and attorney with “significant” transactional and commercial lending expertise.
Abaca’s other co-founder and president, Brian Bauer, will serve as CFO of Safe Harbor. Bauer is a fintech expert with a “successful track record” in venture financing and business development, the company said.
Other Abaca C-Suite executives will also join Safe Harbor, such as co-founders Greg Ellis and John Foley and payments industry veteran Doug Elkins.
“Following its recent Nasdaq listing and key additions to its leadership team, Safe Harbor is positioned to be a leader in matching financing and banking offerings to the regulated operating U.S. cannabis industry across the country,” said Roda.
On the 1-year anniversary, Safe Harbor will pay an additional $3 million in cash and $12.6 million in Safe Harbor common stock based on the 10-day volume-weighted average price prior to the anniversary. There will be a final cash payment of $3 million to be paid at the 2-year anniversary.
The transaction is expected to close this quarter, subject to regulatory approvals and other customary conditions.
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