VivoPower International PLC announced a major move into the digital asset space. The Nasdaq-listed company will acquire privately held XRP shares worth $100 million. This follows a two-month review of Ripple’s operations and financials.
The deals will be struck directly with existing Ripple shareholders, subject to approval from Ripple management. In addition to this transaction, VivoPower will continue to purchase and hold XRP tokens. Ripple initially created 100 billion XRP, and around 14 million have been irrevocably taken out of circulation.
41 billion XRP remain under Ripple’s control, with most locked in escrow. The company also runs several other businesses, such as its RLUSD stablecoin, prime brokerage company Hidden Road, custodians MetaCo and Standard Custody, and stablecoin payment platform Rail.
With the acquisition, VivoPower becomes the sole US-listed firm offering shareholders exposure to Ripple shares and XRP tokens. The strategy seeks to reduce the effective acquisition price for XRP compared to buying it directly from the market.
Acquisition valued at 86% discount to XRP reserves
VivoPower pegs solid value opportunity from this acquisition. At an industry-average price, every $10 million in Ripple shares would potentially add $5.15 in value per VivoPower share. That is subject to market prices in XRP, VivoPower stock, and Ripple share costs. Ripple’s holdings in XRP alone have an approximate market value of around $135 billion.
VivoPower would buy Ripple shares at a weighted average valuation of around $19 billion. That’s an 86% discount to Ripple’s XRP reserves’ market value. At that calculation, VivoPower would be paying $0.47 per token for XRP, without even counting Ripple’s other businesses.
The company also derives benefit from Ripple’s growing stablecoin initiatives. RLUSD most recently collaborated with BNY Mellon, and the segment showed healthy growth. Ripple’s other segments, like Hidden Road and Rail, add further diversification to the investment.
Strategy targets yield optimization and cost efficiency
VivoPower will acquire full legal ownership of the Ripple shares and list directly on Ripple’s shareholder register. The company will avoid special-purpose vehicle structures, which carry extra costs. An independent auditor will review the Ripple holdings every quarter.
For custody and transaction execution, VivoPower has engaged BitGo and Nasdaq Private Market. This ensures secure handling of both Ripple shares and XRP assets. VivoPower is positioning itself as the first XRP-focused digital asset enterprise.
Its goal is to retain assets for the long term as it facilitates the development of the Ripple Ledger and associated blockchain applications. With this two-layered investment into shares of Ripple and XRP tokens, VivoPower is seeking a combination of yield optimization and cost-effectiveness that it thinks will provide high returns to shareholders.
