US Web banking and EBPP vendor Online Resources has signed a definitive agreement to acquire biller service provider (BSP) Internet Transaction Solutions (ITS) for $45 million in stock and cash.
Ohio-based ITS provides Web, IVR and call centre payments to the receivables management and utility industries. The firm has over 150 clients and processes more than five million payments per year.
Online Resources says ITS clients will become part of its bank and biller payment origination and settlement network. In addition to the client base, Online Resources says ITS brings patent pending enrollment capabilities.
Matthew Lawlor, chairman and CEO of Online Resources says the ITS unit also "provides a complementary distribution channel for our collections and pin-less debit capabilities".
Virginia-based Online Resources says it expects ITS to contribute approximately $7 million in revenue to its full year 2007 results and will be slightly accretive to core net income per share.
The vendor expects to close the transaction within the next 30 days, at which time ITS will become part of its e-commerce Division, led by executive vice president and general manager Robert Craig.
Online Resources first entered the BSP business through the acquisition of Princeton eCom in July 2006.
News of the latest acquisition comes as Online Resources reported second quarter net loss available to common stockholders of $1.2 million, compared to net income of $1.4 million in the prior year.
However revenue was up 84% to $31.9 million, from $17.4 million in second quarter 2006, while Ebitda increased to $7.8 million, up 89% from $4.1 million in the prior year.
"Our performance was driven by continued revenue growth on seasonally appropriate bill pay transactions, leverage in our business model, and the absence of one-time accounting charges we incurred last quarter," says Lawlor.