Smartpay Finalises Deals
Smartpay Finalises Deals To Maximise Shareholder Value
Auckland, 14 October 2008 - New Zealand's electronic product distribution and payments processing provider SmartPay Ltd (NZX: SPY) announced today that it has finalised two key transactions to complete the purchase of Merchant IP Services Limited (MIPS) and its finance arm MIPS Financial Services Limited (MFS).
Ian Bailey, Managing Director of SmartPay says that following the purchase of MIPS by SmartPay earlier this year, the Company has reached an agreement with the previous owners to bring forward and settle all of SmartPay's obligations in terms of the earn out provisions of the original Sale and Purchase Agreement.
"This will result in a significant lower number of shares to be issued to settle the earn out provision of that agreement, as well as provide certainty to shareholders and vendors. At the same time, the Company is also pleased to announce that it has acquired MIPS finance arm, MIPS Financial Services Limited, which means that we now have all of these key assets within SmartPay. MFS has its own finance lines and it provides rental services to MIPS and SmartPay's customers, so it is an integral part of the MIPS offering to merchants."
Bailey said that as part of SmartPay's restructuring, and with a view to maximising shareholder value, the Company is looking at all of its recent acquisitions and ensuring, where possible, that any earn out provisions are removed and/or mitigated to ensure value is maintained for shareholders .
"Shareholders have told us that they wish to see greater certainty and reduce the risk of future dilution. Therefore, where appropriate we will be seeking to bring forward settlement of any other earn out obligations as well."
"Besides MIPS, SmartPay has recently been involved in several other acquisitions that have given the Company a unique platform of providing full services for merchants including, Wi-Fi, VOIP (Voice over IP), IP-POS and broadband. However we want to ensure that we have secured full value in the way these acquisitions were purchased," says Bailey.