Merian Chrysalis (MERI) has confirmed that the underlying asset referred to in the announcement dated 20 July 2020 (we covered the story here) is TransferWise. MERI has participated in TransferWise’s US$319m secondary share sale, which valued the business at US$5bn.
MERI’s first sale
The transaction is the first sale conducted by the MERI and has generated a significant return for shareholders. The share price implied by this transaction represents a gross uplift on the company’s initial investment price in November 2018 of 2.2x, or 1.7x on an average price basis. The latter implies an internal rate of return of circa 63% (on a US dollar basis, assuming the new valuation is applied to the remaining TransferWise holding in the Company).
As of the Interim Report to 31 March 2020, TransferWise comprised over 18% of the MERI’s NAV, and this transaction represented an opportunity to control the size of the company’s position at this new valuation; MERI notes that its manager continues to believe in the long-term investment case for TransferWise.
This disposal has increased the company’s available cash balance by circa £20m to approximately £55m.
Nick Williamson, portfolio manager at MERI, noted: “TransferWise has been a very successful investment for Merian Chrysalis, having delivered a gross valuation uplift of approximately $50m over our holding period. It still represents a significant part of our portfolio and we continue to be excited by growth prospects for the business. Its new valuation demonstrates the attractiveness to global investors of tech-enabled disruptors as they scale up, and we’re delighted to be able to crystallise some of this gain for the benefit of our shareholders.”
MERI: Merian Chrysalis reveals TransferWise partial realisation