EFT Canada to Acquire Credit Card Gateway
13 July 2011 - 12:08AM
Marketwired
EFT Canada Inc (TSX VENTURE: EFT), a publicly traded company based
in Toronto Ontario, today announced that it entered into a Letter
of Intent to acquire the technology assets of privately held,
Toronto, Ontario-based Linterna Technologies Ltd. ("LTL") for a
total purchase price of $650,000. The acquisition is expected to
close on August 19th, 2011 and is subject to certain customary
conditions, as well as the completion and signing of a definitive
agreement and approval by the TSX Venture Exchange.
LTL operates mainly as an electronic transaction processing
consulting firm specializing in operational processes, banking
relationships and fraud related controls. The java based software
provides its users a web-based point of sale interface that
merchants can utilize to accept server to server credit card
transactions and the ability for a variety of mobile e-wallet
options. In addition, the technology has a built in rules based
fraud detection system that is integrated with a number of
third-party services that will allow EFT Canada to expand its
product offering beyond just financial transactions.
EFT Canada will pay LTL for its technological assets, namely the
credit card processing gateway, a total of $650,000 by way of
$325,000 in cash, of which $125,000 is due on the closing date, and
$325,000 payable in common shares of EFT Canada. The remaining cash
payment of $200,000 is due on the twelve month following the
closing date, subject to delay and reduction if operating targets
are met.
Common shares of EFT Canada issued to LTL will immediately be
held in escrow and released in three equal installments following
months 6, 12 and 18 following the closing date.
In addition to the purchase price, LTL will be paid by EFT
Canada $0.05 per credit card transaction processed for a period of
three years following the closing date. Such payments shall not to
exceed an aggregate of $330,000.
On the closing date and as part of the agreement, James Watt, a
principal of LTL, will enter into a two year consulting agreement
with EFT Canada. Further, EFT will be creating and filling two new
employment positions to support the new credit card gateway
platform.
SMEs are increasingly using internet based services to manage
their businesses and there is a growing demand for cost effective
and secure transaction processing services, coupled with high
levels of support. The acquisition of the LTL credit card gateway
technology is an important step in fulfilling EFT Canada's vision
to provide a business solution to SMEs which enables them to
transact in EFT's, debit and credit card transactions. EFT Canada
believes the acquisition will allow it to significantly increase
gross revenues.
Once the acquired asset has been integrated, in addition to
electronic funds transfer, EFT Canada will be able offer its client
base of over 800 SME's, credit card processing services.
Jonathan Pasternak, President of EFT Canada, commented: "The
technology being acquired from Linterna, represents an important
part of EFT's vision to place under one umbrella organization all
services needed by our merchants to process electronic payments.
Moreover, we anticipate excellent long-term value and shareholder
appreciation in the combined entity".
EFT Canada has not entered into any definitive financing
arrangements at this time and believes it will be able to complete
the acquisition using existing capital resources.
About EFT Canada
Founded in 2003, EFT Canada Inc. is a financial processing
company that offers a complete solution to the collection and
payment processing needs of small and medium sized business
merchants, banks, credit unions, and other financial firms in
Canada and the United States. The Company develops, maintains and
delivers innovative electronic transaction processing technologies,
such as customized electronic payment and collection processing
solutions and gift and loyalty card services, by drawing on its
operational and applications expertise. For more information,
please call 416-781-0666 or visit www.eftcanada.com.
This press release contains forward-looking statements which
reflect the Company's current expectations regarding future events.
The forward-looking statements involve risks and uncertainties.
Actual results could differ significantly from those projected
herein.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for adequacy or accuracy of the content of the
information contained herein.
Contacts: EFT Canada Inc. Jonathan Pasternak President
416-781-0666 www.eftcanada.com
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