TORONTO, ONTARIO, July 18 / MARKET WIRE/ --
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 privately held, San Diego, California-based Secure Payment Systems Inc. ("SPS"), a leading provider of integrated electronic financial services to thousands of small and medium sized clients in Canada, the United States and Mexico. The acquisition is subject to certain customary conditions, as well as the completion and signing of a definitive agreement following approval by the Toronto Stock Exchange Venture Exchange.
SPS was founded in 1996 by Linden (Lin) Fellerman who has 30 years of transaction processing experience. For the 10 years prior to starting SPS, Lin had served as President of the Telecredit and Equifax Check Services subsidiaries (later known as Certegy Check Services and now owned by Fidelity National Information Services). An integral part of the acquisition is that Mr. Fellerman will enter into a formal employment agreement with EFT Canada and continue to operate SPS on a full time basis in the same capacity as CEO & President.
Through its network of 500 independent sales organizations, customer base exceeding 6,000 merchant locations, modular processing systems, and sophisticated risk management algorithms, SPS is reporting that it has already surpassed its 2007 profitability by a wide margin despite only reporting 6 months of 2008 data. SPS provides its clients with a broad range of services including but not limited to electronic cheque approval, point-of-sale electronic cheque conversion, gift & rewards card processing, and host & web-based ACH/EFT transaction clearing.
Lin Fellerman commented, "This deal represents a good fit for our employees, clients, and sales agents as it provides the basis from which to execute a cross-border financial services strategy while at the same time continuing to operate our business without any impact to services or customers. Moreover, we anticipate excellent long-term value and shareholder appreciation in the combined entity".
"EFT Canada is pleased to welcome Secure Payment Systems and its employees to our company. Their customer base fits nicely with EFT Canada's philosophy of providing services to small and medium sized business owners," said Jonathan Pasternak, President of EFT Canada. "In addition to being accretive to earnings and significantly increasing gross revenues, this acquisition is exciting as it represents a significant first transaction in our domestic and international growth strategy while at the same time diversifying our profitable payment processing services platform", added Mr. Pasternak.
As the vendor is a related party to EFT, since Mr. Fellerman is a director of EFT, this acquisition is considered a related party transaction under Multilateral Instrument 61-501 ("MI 61-501"). The valuation requirement set out in MI 61-501 applies to the acquisition since the value of the transaction is above certain financial thresholds set out in MI 61-501.
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.
About Secure Payment Systems, Inc.
Secure Payment Systems, Inc. (SPS) (www.securepaymentsystems.com) was founded in 1996 by Linden (Lin) Fellerman, former 20 year employee and 10 year President of the Telecredit / Equifax Check Services subsidiaries. He attributes this success, and Secure Payments Systems' growth rate, to unprecedented customer service levels that begin and end with a philosophy that empowers sales agents and employees while rewarding and encouraging unusual attention to detail. www.securepaymentsystems.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.
EFT Canada Inc.