Welcome!

News Feed Item

DirectCash Payments Inc. Announces Acquisition of DirectCash Bank

CALGARY, ALBERTA -- (Marketwired) -- 05/13/14 -- DirectCash Payments Inc. (the "Company") (TSX: DCI) is pleased to announce that it has entered into an agreement (the "Agreement") to acquire DirectCash Bank (the "Bank"), a Schedule I Canadian chartered bank, through the acquisition of all of the issued and outstanding shares of the Bank's sole shareholder, 6676405 Canada Ltd. ("6676405"), for consideration of $15 million, payable in the form of common shares of the Company ("Common Shares") issued from treasury at a price of $13.9148 per share, which is equal to the 20 day volume-weighted average trading price of the Common Shares on the Toronto Stock Exchange as at the close of business yesterday (the "Transaction"). Accordingly, upon closing, the Company will issue 1,077,989 Common Shares to the shareholders of 6676405, subject to adjustment on account of a minimum net asset value of the Bank as at closing in accordance with the terms of the Agreement. Closing of the Transaction is subject to a number of regulatory, governmental and other approvals and consents, including the approval of the Minister of Finance (Canada) and the Toronto Stock Exchange, and is expected to occur in the second half of 2014.

The Bank is a Schedule 1 Canadian chartered bank and is a principal member of Visa, Mastercard and Interac. The acquisition of the Bank will enhance the marketing flexibility of the Company and better enable the Company to take advantage of opportunities which arise in the industry. As the payment industry evolves, having 100% ownership of a Schedule 1 chartered bank in Canada will provide the Company with a unique and not easily replicable competitive advantage for the long term that compliments the Company's pre-paid card business, as well as the credit union and financial institution processing and outsourcing business that was recently acquired. The Bank does not engage and has never engaged in any lending activities. The acquisition of the Bank is strategic for the reasons indicated and in light of the existing contractual arrangements between the Company and the Bank. The Transaction is subject to adjustment on account of the minimum net asset value of the Bank as at closing being approximately $7.0 million.

As 6676405 is indirectly owned by Jeffrey Smith, President, Chief Executive Officer and a director of the Company, and Susan Anderson, a former director of the Company, the Transaction is considered a "related party transaction" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Accordingly, in November of 2013 when the Company first considered acquiring the Bank, the board of directors of the Company (the "Board") established a committee of independent directors, being Messrs. Bradley Hurtubise, Lee Thiessen and Barry Sechos (the "Committee"), for the purposes of reviewing and evaluating the Transaction.

In the course of carrying out its mandate, the Committee retained independent legal counsel and independent financial advisors. The Committee, through consultation with its advisors, determined that the Transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Transaction exceeds 25% of the Company's market capitalization calculated on the basis of its issued and outstanding Common Shares. Despite such exemption from the valuation requirements of 61-101, the Committee obtained a business valuation of the Bank from its independent financial advisors for purposes of assisting it in evaluating the Transaction.

Based upon, among other things, a written fairness opinion from the Committee's independent financial advisors that the consideration to be paid by the Company for the Bank was fair from a financial point of view to the shareholders of the Company, and after consulting with its legal and financial advisors, the Committee unanimously resolved to recommend the Transaction to the Board. Upon the report and recommendation of the Committee, the Board determined that the Transaction is in the best interests of the Company and its shareholders and approved the Transaction, with Mr. Smith and Messrs. Wolfe and Dundas (each of whom is or was previously a director of the Bank) abstaining. Each of Messrs. Smith, Wolfe and Dundas declared their conflict of interest in respect of the Transaction and were not involved in the negotiations, analysis or assessment of same.

The Company is the largest branded ATM provider in Canada and Australia, and the third largest branded ATM provider in the United Kingdom. It also offers ATM services in Mexico and New Zealand. The Company is one of the leading providers of credit union and other financial institution processing and outsourcing, branded non-financial institution debit terminals and pre-paid card products in Canada. Additional information about the Company is available on SEDAR (www.sedar.com) and on the Company's website at www.directcash.net.

Forward-looking Statements

Certain statements contained in this news release constitute forward-looking statements or information (collectively, "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements concerning the proposed acquisition by the Company of the Bank through the acquisition of all of the issued and outstanding shares of 6676405, including the impact of the Transaction on the Company and timing for closing of the Transaction.

With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things, the timing of receipt of regulatory approvals for the Transaction (including Toronto Stock Exchange approval and approvals under the Bank Act (Canada)), the ability of the Company to complete the Transaction and the ability of the Company to execute and realize on the anticipated benefits of the Transaction.

Although the Company believes that the expectations reflected in the forward looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These risks and uncertainties include, among other things, the failure of the Company to receive required approvals to the Transaction in a timely manner, or at all, delays in completing the Transaction and the risk that the Company may not complete the trasaction and the other factors described under "Risk Factors" in the Company's most recently filed Annual Information Form available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release speak only as of the date of this news release. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Contacts:
Jeffrey J. Smith
Chief Executive Officer
(403) 387.2101
[email protected]

Amanda J. Gallacher
Vice President Investments
(403) 387.2158
[email protected]

R. Bradley Hurtubise
Director and Committee Chairman
(403) 612.2538
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, will examine the regulations and provide insight on how it affects technology, challenges the established rules and will usher in new levels of diligence...
SYS-CON Events announced today that SkyScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-securit...
"We are an IT services solution provider and we sell software to support those solutions. Our focus and key areas are around security, enterprise monitoring, and continuous delivery optimization," noted John Balsavage, President of A&I Solutions, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, provided a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services with...
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Karthik Lalithraj, a Principal Solutions Architect at Kinetica, discussed how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich...
SYS-CON Events announced today that Calligo has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo is an innovative cloud service provider offering mid-sized companies the highest levels of data privacy. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalized support service from its globally located cloud platfor...
"We want to show that our solution is far less expensive with a much better total cost of ownership so we announced several key features. One is called geo-distributed erasure coding, another is support for KVM and we introduced a new capability called Multi-Part," explained Tim Desai, Senior Product Marketing Manager at Hitachi Data Systems, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
There is a huge demand for responsive, real-time mobile and web experiences, but current architectural patterns do not easily accommodate applications that respond to events in real time. Common solutions using message queues or HTTP long-polling quickly lead to resiliency, scalability and development velocity challenges. In his session at 21st Cloud Expo, Ryland Degnan, a Senior Software Engineer on the Netflix Edge Platform team, will discuss how by leveraging a reactive stream-based protocol,...
"DX encompasses the continuing technology revolution, and is addressing society's most important issues throughout the entire $78 trillion 21st-century global economy," said Roger Strukhoff, Conference Chair. "DX World Expo has organized these issues along 10 tracks with more than 150 of the world's top speakers coming to Istanbul to help change the world."
"At the keynote this morning we spoke about the value proposition of Nutanix, of having a DevOps culture and a mindset, and the business outcomes of achieving agility and scale, which everybody here is trying to accomplish," noted Mark Lavi, DevOps Solution Architect at Nutanix, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
DX World EXPO, LLC., a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.