BREAKING: Tungsten acquires OB10 (valued at £99m) and buys a bank too!

Tungsten Corporation has agreed the conditional takeover of OB10 for £99m in cash and shares. Tungsten also signed a five-year rolling licence agreement with @UK plc to deploy its analytic software technology to enable TungstenAnalytics to be delivered across OB10′s Tungsten’s global e-invoicing network.

And Tungsten has another tric in its sleve. It also decided to acquire an identified duly authorised UK bank, whose assets solely comprise short term UK gilts and/or certificates of deposit and to seek admission to trading on AIM.

E-invoicing, OB10 and Tungsten

Tungsten has conditionally agreed to acquire OB10 with a network of 122 buyers and 140,000 suppliers (of which 77,939 were active in the past 12 months), providing a large line-level item global data set.

An analysis by TungstenAnalytics of an anonymous sample of UK invoice data identified potential cost savings related to price variance of 1% of total spend; it is believed that a price benchmarking exercise could produce further savings of up to 4%.Tungsten Corporation group chief executive Edmund Truell said: “We have an exciting opportunity to create a disruptive global player, by enhancing the offering of OB10′s leading global e-invoicing network which already serves a number of the world’s largest corporates and governments. In addition, we believe that TungstenAnalytics can provide considerable savings for buyers on the platform from which we would expect to benefit.”

About Tungsten

Tungsten was founded a year ago by brothers Edmund and Danny Truell to identify and acquire a company, business or asset within the financial services sector which it can grow into a business with a significant market presence in a segment with potential for sustainable long-term cash generation, return on equity and growth.

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1 Comment

  1. Enrico Camerinelli

    Tungsten has the right ingredients. But is Tungsten a good cook? Using another metaphor, they have key orchestra players, but is the director as good? I will like to see how Tungsten will blend the various ingredients to build a solid value proposition. So far they certainly enjoy not being a bank, therefore not being subject to regulatory restrictions and limitations. At least until shadow-banking will not be put under the scrupulous lens of the regulator. This gives them quite some room to operate. As in any supply chain finance program the issue is not to have a good lineup of technology and products, but to create value to the corporate user. That is something that technology cannot buy.

    The fact they are not bankers also gives them additional edge, as a bank-centric strategy has never helped these initiatives to succeed. Just see what happened to JPM/XIGN, and, very recently, to USBancorp/VISA. Banks tend to buy/develop software and then use it for internal purposes before extending it out to clients. So the resulting solution (i.e, the “platform”) is very effective at optimizing bank operations and STP at the expense of the end user who has to duplicate data and re-key information before enjoying the benefits.

    The spend analytics component is indeed intriguing and shows a good vision. Again, only time will show how successful their approach of adding this component to the puzzle will be. In its own, spend analysis is not new. Certainly not for players of the likes of Ariba or Basware.
    So I will carefully watch how Tungsten will make it a competitive differentiator.