Polish IT firms cyber_Folks and Shoper announced on May 21 their plans to join forces, strengthening their position as the leading e-commerce technology provider in CEE. The combined entity's market capitalisation is seen at around €1bn.

The corporate consolidation is aimed at simplifying the group structure to attract a broader base of international investors.

"Having listened to our investors, we have decided to merge Shoper and cyber_Folks. We are simplifying the Group's structure, which - particularly from the perspective of foreign investors - was at times too complex. This will create a larger entity with higher market capitalisation, a larger free float and significantly higher share liquidity, which should increase interest from global technology funds and institutional investors. We are meeting market expectations and building a single, strong entity focused on e-commerce," said Jakub Dwernicki, CEO of cyber_Folks and Shoper, quoted in a press release.

"I am convinced that the synergy of expertise, technology and scale between the two organisations will allow us to build a European leader in e-commerce technology even faster and compete more effectively on the international market," he added.

Currently, cyber_Folks, a mid-cap company listed on the Warsaw Stock Exchange, holds a 49.9% stake in Shoper, a WSE small-cap company. The market capitalisation of the former is PLN3.04bn (€717mn), while of the latter PLN1.24bn (€292mn).

The companies anticipate that the unified scale will heavily move the needle for global market visibility.

"According to the proposed plans, the combined entity’s market capitalisation will be around $1bn, which could significantly boost the company’s appeal to foreign institutional investors and global technology funds," the release reads.

The merger will take place through the transfer to the acquiring company (i.e. cyber_Folks) of all the assets of the acquired company (i.e. Shoper), whilst simultaneously increasing the share capital of the acquiring company through the issue of merger shares, which the acquiring company will issue to the shareholders of the acquired company, both companies announced in their respective market filings.

Equity holders in the smaller entity will receive standard converted stock as part of the transaction.

"Persons who are shareholders of the acquired company on the record date will receive merger shares on an exchange ratio of 0.2281:1, whereby each 1 share of the acquired company will be exchanged for 0.2281 shares of the acquiring company," the filings read.

The ultimate aim of the process is to build a single, strong entity focused primarily on e-commerce and to further expand its operations in the European market.

"The combined organisation will develop one of the most comprehensive technology ecosystems for e-commerce in Europe - encompassing sales platforms, payments, logistics, communications, automation and AI solutions supporting merchants in managing the entire online sales process," the companies concluded.