Pipeline Data Inc. (OTCBB:PPDA) announced today the execution of a definitive agreement to acquire Illinois-based World Products, Inc. d.b.a. "AIRCHARGE." AIRCHARGE is the first company to deploy a cellular phone-based solution for mobile business merchants to accept credit cards at the point-of-sale.
IRCHARGE was recently designated a national "Industry Solutions Partner" by one of the leading national wireless communications service providers to provide credit card processing and wireless check conversion on all of the company's Java-enabled phones.
MacAllister Smith, Pipeline's CEO, sees AIRCHARGE as an exciting avenue for potential growth. "The AIRCHARGE acquisition positions Pipeline to capitalize on the expansion of the wireless payment processing industry," he said. "Combining AIRCHARGE's capabilities in developing cellular phone software with Pipeline's expertise in payment processing and extensive history in the wireless market, will position Pipeline to become a significant force in wireless payments."
In a May 2004 report, research firm TowerGroup predicts by 2009 wireless devices will account for one in four new point-of-sale terminals delivered in the United States. Based on research conducted with leading manufacturers and market end users, Mercator Advisory Group has estimated a potential market of over $1 billion for wireless WAN and wireless LAN point-of-sale terminals.
"We've been using Pipeline Data's gateway software for many years as a key component to facilitate credit card transactions. It was logical that the two companies should combine to service the wireless payments market," stated Bob Wallace, president of AIRCHARGE. "We are looking forward to joining the Pipeline team."
Under the terms of the agreement, Pipeline will acquire AIRCHARGE for $200,000 in cash, $525,000 in the form of a promissory note and 900,000 shares of Pipeline Data common stock. An additional one million shares of Pipeline Data common stock will be granted subject to performance incentives. Pipeline is required to close the transaction by September 30th of this year.
Pipeline will retain AIRCHARGE's senior management team of Rich Hoffman and Bob Wallace, pursuant to written employment agreements.