Online Resources Corporation (Nasdaq:ORCC), a leading provider of web-based financial services, today announced it has completed its acquisition of Princeton eCom Corporation on July 3, 2006, and has filed with the Securities & Exchange Commission.
As previously announced, the acquisition price was $180 million in cash, plus an earn-out up to $10 million. Related acquisition financing was also completed on July 3, 2006, consisting of $85 million in long-term debt and $75 million in convertible preferred stock.
"The combination with Princeton eCom clearly establishes Online Resources as a leader in electronic bill payments," stated Matthew P. Lawlor, chairman and chief executive officer of the Company. "We welcome Princeton's clients, partners and staff to Online Resources. We also thank Princeton's shareholders, led by CCP Equity Partners, Lazard Technology Partners and Mellon Ventures, who facilitated a very smooth integration in the transition period before closing."
Acquisition financing was provided by Tennenbaum Capital Partners, who will be represented on Online Resources' Board of Directors by Steven C. Chang, a partner at Tennenbaum.
"We believe that earnings and revenue growth potential is excellent, given surging consumer billpay adoption and Online Resources' strong competitive position," stated Chang. "As a long-term investor, we are also attracted by the Company's highly visible business model, its well diversified client base, and management's track record of delivering on its promises."
Revised 2006 Business Outlook
The Company commented on preliminary second quarter results and revised its guidance for full year 2006. These statements are forward-looking, and actual results may differ materially.
The Company expects second quarter 2006 results to be at the high end of, or exceed, its core earnings guidance, and at the low end of its revenue guidance.
With the acquisition of Princeton eCom and expected synergies, the Company is increasing its full year 2006 guidance as follows:
- Revenue is increased to $92.0-$95.0 million versus previous full year 2006 revenue guidance of $72.0-$75.0 million;
- Earnings before interest, taxes, depreciation and amortization (Ebitda) is increased to $21.5-$23.0 million, versus previous guidance of $17.9-$18.9 million. Treating the preferred stock as if it was fully converted to common, Ebitda per share is expected to be $0.67-$0.71 per share, versus previous guidance of $0.64-$0.68 per share.
The Company has previously stated that it expects core earnings to be diluted by $0.07-$0.10 per share as a result of the acquisition. The Company will update this and net income guidance after it completes its assessment of intangible assets resulting from the acquisition, accounting treatment of its convertible preferred stock, and any impact on its tax position. Management will provide additional post-acquisition guidance with its second quarter 2006 financial results on Monday, July 24, 2006.