The acquisition of Roteo will complement Gefen’s growth strategy as set out in its IPO prospectus, as the company continues to add more agents to its Arena platform.

Gefen International (ASX:GFN) continues to progress along the growth path set out in its prospectus, after jointly buying out 80% of Israeli-based tech firm, Roteo.

The purchase, made jointly with Verify Insurance Agency, which is a subsidiary company of Gefen, involved acquiring 80% of Roteo’s shares from three individual shareholders.

The deal will see Gefen taking a 70% stake in Roteo, with Verify holding the other 10%.

Gefen will pay approximately $1.2m in cash, with 80% payable on completion of the deal and 20% payable in 12 months’ time.


Sassy Roteo

In addition, Gefen will also issue $248k of its own shares to the sellers, with the exact number to be calculated three months after the date of completion.

Roteo is a SaaS company focusing on advanced CRM (Customer Relationships Management) software, which is primarily designed for agents who specialise in providing complex financial services and products to clients.

Gefen co-CEO Orni Daniel believes there is great synergy from acquiring a fast-growing CRM company like Roteo.

“As a technology disruptor in the finance and insurance independent agent networks industries ourselves, we are delighted to announce the acquisition of Roteo, a technology company that demonstrates an innovative approach,” Daniel said.

During the last three years, Roteo’s SaaS CRM platform has rapidly grown to around 1,000 independent agents, which shows its value to this network.

“With Roteo joining Gefen Arena, onboarding the 1,000 independent agents, the company achieves a great synergy, widens its technological suite, and increases its overall market value,” Daniel continued.


Roteo locks into Gefen’s growth strategy

This transaction complements the growth strategy as set out in the company’s IPO prospectus of acquiring and onboarding independent “agent networks” to the Gefen Arena platform.

It’s expected that Roteo will provide a SaaS CRM platform solution for agents which have been onboarded on the Gefen platform.

The company says the Roteo platform is simple to use and supports multiple hardware devices to dramatically simplify the complex management of financial products.

Roteo’s business model is based on granting a license by charging a monthly or annual fee, and the platform is currently used by approximately 1,000 financial advisors and agents in Israel.

The 24/7 platform is also compliant and secured in the Israeli market, with main modules that include data Integration, data analysis, and internal CRM.

“The shared vision and trust that Gefen management gave us is the best proof that technology has the power to make ordinary people’s lives easier and more productive,” said Roteo’s CEO, Roey Segal.

“Gefen’s international arena offers enormous new opportunities to expand into new markets and geographical areas,” he said.


What’s next for Gefen

The deal shows Gefen’s willingness to invest in its Arena platform, as the company continues to explore opportunities to increase the value of the offering.

Gefen developed the disruptive platform for regulation-heavy industries such as finance and insurance, in which agents mediate the selling of complex products between carriers and customers.

According to the company, Arena is the world’s first platform provider that transforms agent-based networks in the insurance and finance industries into practically digital sales fleets.

Under the terms of the deal, Roteo CEO Roey Segal will grant a put option to Gefen over his remaining 20% stake in Roteo for cash, or exchange it into Gefen shares.

If the put option is exercised, the value of the remaining 20% will be calculated as follows: price per share paid upon completion of the deal, multiplied in the increasing or decreasing ratio in Roteo’s revenue.

Gefen said that no external fundraising will be required for this transaction as it will be paid out of the company’s existing cash reserves.

The transaction is expected to be completed on or around 7 February, and no shareholder approval is required.

This article was developed in collaboration with Gefen International, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.