Acquisitions to accelerate expansion in US payments market. 1 July 2014

Transcription

1 Acquisitions to accelerate expansion in US payments market 1 July 2014

2 Agenda 1. Transaction overview 2. Deal structure & financing 3. Financial position 4. Summary Presentation team Joel Leonoff President & CEO Keith Butcher CFO

3 Transaction highlights Agreement to acquire all of the partnership interests of Meritus Payments Solutions for $210 million Additional agreement to acquire trade & assets of Global Merchant Advisors ( GMA ) for up to $15 million Funding: $60 million shares (issued over 4 years), balance in cash & partially funded by credit facilities of $150 million Acquisitions accelerate Group s growth opportunities key accomplishment of strategic objective in

4 Meritus Payment Solutions A payments platform provider for US based merchants with 100+ employees - founded in 2008, based in California Currently processes more than $3 billion+ annually in transaction volume - focused on small & medium sized merchants (SMB) and card not present (CNP) market Streamlined merchant boarding process, strong partnerships with leading US acquiring banks High growth and profitable business - earnings doubled in 2013 with a 55% increase in the volume of transactions processed FY 2013: Revenue $74.4 million; PBT $1.1 million; normalised EBITDA $13.0m (1) FY 2012: Revenue $38.3 million; PBT $0.7 million; normalised EBITDA $6.0m (1) (1) Normalised EBITDA is after adjustments to remove management drawings and other costs that will not recur following the acquisition 4

5 Leading payments processor in rapidly expanding US e-commerce market Multi-channel sales distribution model; client base of 8,000+ merchants Payment solutions: mobile, credit/debit cards, gift/loyalty cards, fraud management, ACH (automated clearing house) Proprietary products & platform: payment, recurring billing, chargeback & fraud management system Diverse base of merchant accounts Merchant Count: 8, Volume processed in 2013: c$3 billion Transactions processed in 2013: 25+ million 5

6 Global Merchant Advisors Fast growing online payments company launched in 2010, based in California Focused on market segments underserved by larger competitors offers processing solutions to SMB merchants Merchant base & processing volume developed via direct sales approach with a network of bank, third-party processors & technology partners FY 2013 (2): Revenue $8.3 million; PBT $0.1 million; normalised EBITDA $4.6m (1) (1) Normalised EBITDA is after adjustments to remove management drawings and other costs that will not recur following the acquisition (2) Unaudited 6

7 Strategic rationale Enhance growth & diversify the business Acquisition of fast growing businesses in key US market Adds 8,000+ small to medium sized (SMB) merchants to portfolio Successful, established multi-channel sales force Additional acquiring relationships with leading US banks Adds scale to NETBANX diversifies & broadens gateway Strong financial rationale expected to enhance earnings Acquisition of profitable, fast growing and cash generative businesses Major merchant concentration materially reduced Strategic fit Synergistic corporate culture, values & entrepreneurial spirit Brand strength 7

8 Agenda 1. Transaction overview 2. Deal structure & financing 3. Financial position 4. Summary

9 Deal structure Meritus Payment Solutions (Meritus) Acquisition of partnership interests of Meritus Consideration: $210 million Cash: $150 million Shares: $60 million (issued in equal tranches over 4 years) Expected to close in Q Global Merchant Advisors (GMA) Acquisition of trade and assets of GMA Consideration: up to $15 million (1) Cash: $10 million Balance: $5 million - performance based Acquisition costs Total: $231.5 million Meritus: $210 million GMA: $15 million Costs: $6.5 million 9

10 Financing Bank of Montreal Multi-currency credit facility: $150 million Term loan facility: $100 million Revolving loan facility: S$50 million Funding structure Source Third party debt: $141 million Available cash: $30.5 million Stock: $60 million Total: $231.5 million Use Equity purchase: $225 million Fees & expenses: $6.5 million Total: $231.5 million 10

11 Agenda 1. Transaction overview 2. Deal structure & financing 3. Financial position 4. Summary

12 Exceptional performance At Group level (prior to acquisition) 12

13 Earnings accretion Strong growth expected to continue High growth and profitable business - earnings doubled in 2013 with a 55% increase in the volume of transactions processed FY 2013: Revenue $74.4 million; PBT $1.1 million; normalised EBITDA $13.0m (1) FY 2012: Revenue $38.3 million; PBT $0.7 million; normalised EBITDA $6.0m (1) Profitable, fast growing online payments company FY 2013 (2) : Revenue $8.3 million; PBT $0.1 million; normalised EBITDA $4.6m (1) (1) Normalised EBITDA is after adjustments to remove management drawings and other costs that will not recur following the acquisition (2) Unaudited 13

14 Agenda 1. Transaction overview 2. Deal structure & financing 3. Financial position 4. Summary

15 Progress on strategic initiatives Delivering the present and building the future Drive growth in core business lines Develop multi-channel solutions Deliver new white-label propositions Position for US gaming opportunity Inorganic growth through acquisition 15

16 Summary Acquisitions create significant opportunities: expand in to the US market diversify the business progress on strategic initiatives as a combined entity Shared enthusiasm and entrepreneurial spirit to drive further growth and innovation The combination of our businesses accomplishes a key strategic goal in

17 Legal disclaimer Certain statements in this document are forward-looking statements. These forward-looking statements speak only as at the date of this document. These statements concern, or may affect, future matters and include matters that are not facts. Such statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. The information and opinions expressed in this document are subject to change without notice and neither the Company nor any other person assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained within this document, regardless of whether those statements are affected as a result of new information, future events or otherwise.