Optimal Payments to acquire California based Meritus Payment Solutions to accelerate expansion in U.S. payments market
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Acquisition of leading payment processing company substantially increases scale and drives multi-channel sales growth in rapidly expanding U.S. ecommerce market
Strategic highlights of the Acquisitions
- Acquisition of fast growing companies in key U.S. market
- U.S. merchant portfolio: adds over 8,000 U.S. high growth small and medium businesses ("SMB") in a broad range of vertical markets.
- U.S. sales force: provides a successful, established and multi-channel U.S. sales force.
- U.S. acquiring bank relationships: provides additional established U.S. acquiring bank relationships with leading bank partners.
- Adds scale to NETBANX®: diversifies and broadens
Optimal Payments ' NETBANX payment gateway and acquiring services business.
- Strong financial rationale
- Acquisition of these profitable, fast-growing and cash-generative businesses is expected to enhance earnings.
Meritus financials (audited)- 2013: revenues
$74.4 million , profit before tax$1.1 million , Net assets at31 December 2013 $1.7 million , normalized EBITDA $13.0 million(1) - 2012: revenues
$38.3 million , profit before tax$0.7 million , normalized EBITDA$6.0 million
- 2013: revenues
- GMA financials (unaudited)
- 2013: revenues
$8.3 million , profit before tax$0.1 million , Net assets at31 December 2013 $0.3 million , normalized EBITDA $4.6 million(1)
- 2013: revenues
- Major merchant concentration: expected to materially reduce concentration as a consequence of the Acquisitions.
- Strategic fit: delivers synergistic corporate culture, values and entrepreneurial spirit.
- Brands:
Optimal Payments will continue to operate the Meritus brand which has a strong presence and value in the key U.S. market. - Financing: Bank of Montreal has committed to provide financing for the Acquisitions via multi-currency credit facilities of
$150 million .
(1) Normalized EBITDA is after adjustments to remove management drawings and other costs that will not recur following the acquisition
"The U.S. market represents the single greatest expansion opportunity for
"Combining forces with
Analyst meeting and further information
The presentation slides and, an audiocast of the presentation are available as a replay on the Group's website at: http://www.optimalpayments.com/investor-relations/results-reports-presentations.
For more information on
About
In 2013,
About Meritus Payment Solutions
Established in 2008,
About GMA
Based in
This summary should be read in conjunction with the full text of this announcement.
OPTIMAL PAYMENTS ANNOUNCES THE ACQUISITION
OF MERITUS PAYMENT SOLUTIONS AND GMA
Rationale for the Acquisitions
The Acquisitions will significantly accelerate
The Acquisitions will also allow
Details of the terms of the Meritus Acquisition
- The number of
Optimal Payments shares to be issued in connection with the Meritus Acquisition is determined using the volume weighted average trading price ("VWAP") of the Optimal Payments Shares on the London Stock Exchange's AIM market for the five (5) trading days immediately precedingJuly 1, 2014 which is the date the definitive agreement was signed and which equals £3.93 (the "Signing Date VWAP"). - The total number of
Optimal Payments shares to be issued is then calculated by converting$60 million into GBP using the Bank ofEngland noon rate onJune 30, 2014 and dividing by the Signing Date VWAP which equals a total of 8,954,621Optimal Payments shares. - On each of the four yearly anniversaries of the closing date (each an "Anniversary Date"), one quarter of the above stated number of
Optimal Payments shares will be issued to the sellers. - The sellers will be entitled to additional
Optimal Payments shares or cash (atOptimal Payments ' option) in the event that the VWAP of theOptimal Payments shares on the London Stock Exchange's AIM market for the ten (10) trading days immediately preceding an Anniversary Date drops below eighty percent (80%) of the Signing Date VWAP. - The maximum number of Optimal Payment's shares to be issued in aggregate to the sellers on the four anniversary dates may not exceed ten percent (10%) of the then fully diluted outstanding Group shares. The balance, if any, will be paid in cash.
- Closing of the Meritus Acquisition is subject to customary closing conditions, including:
- Receipt of certain required third party consents;
- Execution of employment agreements and non-competition and non-solicitation agreements with
Meritus senior management; - Execution by the sellers of an orderly marketing agreement relating to the sale of their
Optimal Payments shares; and - Closing of the GMA Acquisition.
Details of the terms of the GMA Acquisition
$10 million in cash will be paid on closing. The remaining$5 million will be paid in cash on the one-year anniversary of the closing if certain earning targets are met.- Closing of the GMA Acquisition is subject to customary closing conditions, including:
- Receipt of certain required third party consents;
- Execution of an employment agreement with the GMA senior manager;
- Execution of a non-competition and non-solicitation agreement with the seller; and
- Closing of the Meritus Acquisition.
Details of the Financing
Bank of Montreal has committed to provide
Forward-looking Statements
Some of the information in this announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may", or "might" the negative of such terms or other similar expressions. The Group wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Group does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Group, including, among others, general economic conditions, the competitive environment as well as many other risks specifically related to the Group and its operations.
Publication on website and availability of hard copies
A copy of this announcement will be available free of charge on
SOURCE
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