Canadian small value payments firm Dexit is appointing Paul Howell as its new president and CEO. Howell is also making a CDN$1.14 million equity investment in the struggling firm.
Formed in 2001, Dexit launched its e-payment tag in Toronto in 2003. More than 450 merchant locations were accepting its tag payments by December 31 2005, and more than 50,000 consumers were registered for the service.
But the company has failed to turn a profit and said in July this year that it was laying off almost half its staff and scaling back operations.
The vendor agreed to explore 'strategic options' for the business after receiving "overtures from several potential strategic investment partners" and hired US financial advisor Kirchner to manage the process.
In today's statement Dexit says Kirchner performed an extensive review of numerous potential strategic alternatives before deciding to accept Howell's offer.
Howell is the founder, chairman and majority shareholder of Howell Data Systems, a provider of point of sale systems and supplier of software, hardware and support services to merchants in the grocery, restaurant, theatre, and general retail industries.
Dexit says Howell submitted a detailed plan to the board of directors outlining a strategy for enhancing and broadening product and services which focuses on decreasing operating expenses, commencing a strong marketing initiative and immediately deploying technology to grow revenues.
As part of the transition, the company says it intends to begin operating as Dexit Hosted Data Solutions. The revamped business will provide private branded payment systems with enhanced accounting and management tools.
Says Howell: "Over the coming months, we will continue to restructure Dexit's operations to reduce monthly expenditures and focus intensely on the goal of achieving profitability in a reasonable time frame."
John McBride, Dexit's chairman of the board and interim president and CEO, says: "This transaction provides an immediate infusion of capital and allows an experienced and seasoned operator with a clear go forward vision and significant personal investment in Dexit to take control of the day to day operations of the company."
McBride adds: "This deal provides working capital, committed leadership and a focused plan for achieving profitability. This is precisely what the company needs at this turning point in its history."
Following completion of the offering McBride and Thomas Pladsen will step down as interim President and CEO and COO, respectively but will maintain their board roles. Dexit says Robert Cudney will also resign from the Dexit board.