Beneficient to acquire Mercantile Bank International to expand alternative asset custody services

Beneficient (NASDAQ: BENF), a Dallas-based platform specialising in exit opportunities and primary capital solutions for alternative asset holders, has announced an agreement to acquire Mercantile Bank International Corp. The acquisition, valued at $1.5 million, will be settled through approximately 2.1 million shares of Beneficient’s Class A common stock and cash.

Mercantile Bank, based in Puerto Rico, operates as an International Financial Entity (IFE) under the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF). This acquisition underscores Beneficient’s focus on alternative asset custody solutions, aiming to enhance its existing fee-based services and create higher revenue opportunities compared to traditional offerings.

Strategic alignment and revenue growth

The acquisition is positioned as a significant milestone for Beneficient, enabling it to expand its custody service expansion efforts to better meet the needs of institutional investors. The deal will support a broader range of institutional investor solutions, particularly for large entities, alternative trading systems, and foreign securities exchanges. Additionally, Beneficient plans to offer depositary receipts to holders of foreign investments, facilitating their access to international markets.

The company highlighted the opportunity to generate revenue through these expanded fee-based services as early as 2025. Beneficient believes the acquisition aligns with its mission to democratise the market for illiquid alternative assets, while capitalising on higher-fee opportunities in alternative asset custody.

Regulatory compliance and timeline

Beneficient confirmed that the acquisition is subject to standard regulatory approval from OCIF, ensuring full compliance with Puerto Rican financial regulations. Mercantile Bank’s status as an international financial entity will provide Beneficient with unique opportunities to expand its services globally, offering clearing, payments, and traditional custody services to non-resident entities.

The deal, expected to close in the second quarter of 2025, represents a key step in Beneficient’s efforts to execute its long-term strategy. By leveraging the custody service expansion enabled by this acquisition, Beneficient is set to enhance its offerings for institutional investor solutions and support its core liquidity products.

Potential for international opportunities

The acquisition of Mercantile Bank is anticipated to drive Beneficient’s growth in alternative financial services. The integration of Mercantile Bank’s resources with Beneficient’s proprietary AltAccess platform will provide enhanced alternative asset custody capabilities. By targeting institutional investors, Beneficient is strategically positioned to address evolving global demands for fee-based services while creating new revenue streams.

Beneficient emphasised that this acquisition would complement its existing business model, helping it to expand its reach in the alternative asset custody sector. As a result, the company anticipates a significant impact on its cash flow and the long-term scalability of its operations.