Apollo’s Greensill bid on the verge of collapse

Apollo Global Management’s plan to buy parts of troubled finance firm Greensill Capital administration is on the verge of collapse, according to people familiar with the matter.

The U.S. private equity firm has halted talks to buy parts of Greensill amid a growing confrontation with a key technology provider to the once high-profile supply chain finance group, the people added.

Discussions were destabilized after US tech company Taulia, which provides the digital platform that most of Greensill’s clients use to manage their working capital, sought to move its users to other providers, primarily the US bank JPMorgan, the people added.

The kind of funding that Greensill provided was lifted against invoices between companies and their vendors, but the SoftBank-backed company did not have its own technology to track the flow of those corporate invoices.

Instead, its customers have used technology group platforms to digitize this process, with Taulia’s systems serving key Greensill customers such as pharmaceutical group AstraZeneca.

Taulia told the Financial Times that her clients wanted “flexibility in the source of funding.”

“As a result of the recent and well-documented challenges facing Greensill, we strive to ensure our clients have continued choice of their funding sources and continued funding,” Taulia added.

Apollo, Greensill and JPMorgan declined to comment.

Apollo was only interested in acquiring parts of Greensill that would give it access to financing lines with large companies such as the Vodafone telecommunications group. The group had no interest in taking financing for Greensill’s biggest customer, industrialist Sanjeev Gupta’s GFG Alliance, people familiar with the matter said.

If talks with Apollo, which this week struck a $ 29 billion deal to merge with insurance subsidiary Athene, cannot be revived, Greensill appears to have few options.

Greensill revealed in his administrative file earlier this week that Apollo had offered $ 59.5 million for its intellectual property and computer systems, which would have implied that it would take “the majority” of its more than 500 employees. company in UK. The US group was “the only credible bidder,” according to court documents.

Failure by Apollo to close a deal would highlight Greensill’s heavy reliance on technology platforms from other companies, although founder Lex Greensill has frequently touted his company’s “business prowess”. artificial intelligence ”and“ machine learning ”.

Taulia had for years an exclusive deal with Greensill, but it expired in early 2020. In April of last year, the San Francisco-based company announced what it called a “strategic alliance” with JPMorgan, to match its technology platform with the bank’s funding.

Leading technology investors such as SoftBank’s $ 100 billion Vision Fund have invested in Greensill, further strengthening its status as one of the world’s most valuable fintechs.

General Atlantic, known for its early support for fintech successes, praised Greensill’s tech savvy, when the U.S. venture capital group invested $ 250 million in the company in 2018.

At the time, General Atlantic Co-Chairman Gabriel Caillaux praised Greensill’s “fully integrated technology and finance solutions”, as well as the company’s “competitive advantage” in the channel finance market. procurement, where companies actually borrow money to pay their suppliers.

Despite Greensill’s reliance on technology from another company, Apollo still believed the deal was likely to continue until recently.

The lawyer for the US private equity firm said in court on Monday that while there were “a few issues to be resolved,” its negotiations were in “final stages” and should “be completed shortly.”

Bloomberg first signaled that Apollo’s talks with Greensill could fail.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *