GreenBox Announces Acquisition of Transact Europe, a Principal Visa and Mastercard Member
GreenBox POS (NASDAQ: GBOX) announced a binding MOU to acquire Transact Europe Holdings OOD for EUR 30M, with performance-based earnouts tied to processing volumes. Transact Europe EAD, a regulated EU electronic money institution, brings a robust payment solution portfolio and a projected 2021 EBITDA exceeding USD 5M.
The acquisition will enhance GreenBox's capabilities by providing access to major card schemes and a full EMI license, allowing expansion in the European market and reducing challenges faced in the U.S. GreenBox plans to onboard UK clients post-Brexit.
- Acquisition price of EUR 30M with potential for substantial management equity earnout.
- Projected EBITDA of Transact Europe exceeding USD 5M for 2021.
- Enhanced capabilities through major card scheme memberships and EMI licenses.
- Opportunity to expand offerings and onboard European clients.
- Pending regulatory approval from the Bulgarian National Bank could delay integration.
- Potential risks associated with meeting UK licensing requirements post-Brexit.
SAN DIEGO, CA, July 19, 2021 (GLOBE NEWSWIRE) -- GreenBox POS (NASDAQ: GBOX) ("GreenBox" or the "Company"), an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions today announced it has entered into a binding MOU to purchase Transact Europe Holdings OOD. Transact Europe Holdings OOD is the single entity shareholder of Transact Europe EAD.
Transact Europe EAD (TEU) is an EU regulated electronic money institution headquartered in Sofia Bulgaria. TEU is a Principal Level Member of Visa, a Worldwide Member of MasterCard, and a Principal Member of China UnionPay. In addition, TEU is part of the direct SEPA program. With a global footprint, proprietary payment gateway and technology platforms, TEU offers a comprehensive portfolio of services, and decades of industry experience. TEU provides complete payment solutions by offering acquiring, issuing of prepaid cards and agent banking, serving hundreds of clients with a projected EBITDA for 2021 in excess of USD
Under the terms of the agreement, the purchase price for the transaction is EUR 30M in cash with the majority of management equity earnout compensation (post acquisition) based on processing volume commitments and hurdles of
With this acquisition, GreenBox will have the following capabilities as a result of TEU’s licensing:
- Principal Member of Visa and MasterCard for Acquiring
- Principal Member of Visa and MasterCard for Issuing
- Principal Member of China Union Pay for Acquiring
- Full Electronic Money Institution license (EMI license)
- A direct member of SEPA
- Able to issue and offer EUR IBANs
- Passport of licenses to all EEA Countries
- Waiver to continue boarding UK clients in 2021
- Software included to run licenses and clients
- Proprietary PCI Level 1 Payment Gateway
Upon completion, the European acquisition would reduce the impact of certain issuing and acquiring challenges faced by GreenBox during its growth in the U.S. market.
The acquisition will allow GreenBox to expand its offerings, including merchant accounts, payment accounts, FX services and a host of other services to prospective European clients. It will also provide GreenBox the opportunity to offer its domestic clients expansion into Europe, greatly enhancing value for its existing and prospective U.S. based clients.
Furthermore, Transact Europe holds a waiver from the UKFCA under Brexit to continue business in the UK for the remainder of 2021 until the needed requirements, which are expected to be released in October, are defined. GreenBox intends to achieve the required UK licensing in order to continue onboarding and servicing customers in the UK.
The acquisition is pending regulatory approval from the Bulgarian National Bank, where TEU’s licenses are held, after which GreenBox can begin consolidation efforts and onboarding of new clients.
GreenBox has already secured the services of seasoned European based industry specialists to spearhead the European expansion to optimize all facets of the combined group.
“This is the most significant acquisition to date for GreenBox and propels the Company into the European marketplace,” said Ben Errez, Chairman of GreenBox POS. “By acquiring Transact Europe, GreenBox can swiftly move to gain market share in the global financial payments space where a void has left opportunity for new market entrants to emerge and dominate. Transact Europe represents the perfect acquisition for us to expand our global footprint and continue to deliver sustainable growth for our shareholders. We are looking forward to integrating the Transact Europe team as part of the GreenBox family.“
Vassil Klaklov, CEO of Transact Europe EAD, commented, “GreenBox is a natural complement to Transact Europe. Our licenses and infrastructure combined with GreenBox’s suite of solutions, global strategy and technology platform will create a power synergy that can quickly scale in the European market. We look forward to joining the GreenBox team and emerging as a leading global payment solutions company.”
About GreenBox POS
GreenBox POS (NASDAQ: GBOX) is an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions. The Company's applications enable an end-to-end suite of turnkey financial products with fraud detection technology, improving the efficiency of handling large-scale commercial processing volumes for its merchant clients. For more information, please visit the Company's website at www.greenboxpos.com.
Forward-Looking Statements Disclaimer
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set out in the Company's SEC filings. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including risks regarding the ability of the parties to close the transaction, receipt of required regulatory consents, and risks related to the Company’s ability to meet the UK requirements. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.
Investor Relations Contact
Mark Schwalenberg
MZ Group - MZ North America
312-261-6430
GBOX@mzgroup.us
www.mzgroup.us
FAQ
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