Neteller acquires Netbanx for £12.36 million cash
01 November 2005 | 2498 views | 0
NETELLER Plc ('NETELLER' or the 'Company'), a leading online money transfer service provider, today announces that it has completed the acquisition of Netinvest Limited and its wholly owned subsidiary, Netbanx Limited (together 'Netbanx'), one of the leading UK independent payment service providers, from Transact Group Limited (the 'Vendor').
Netbanx has relationships with all of the major UK acquiring banks, as well as MasterCard, Visa, American Express, Diners Club, Pago and Euroconex. Netbanx was founded in 1996 and currently processes approximately £10 million of credit card payments each month. It has developed a complete payment solution, providing both direct and bureau processing to a wide range of market sectors, including FMCG, mail order, leisure, publishing, marketing services, professional services, travel and tourism and ecommerce more widely. Netbanx has in excess of 1,500 merchants, including Royal & Sun Alliance, npower and Companies House.
Netbanx Limited, the principal operating subsidiary, reported revenues for the 18 months ended 30 June 2005 of £27,708,385, gross profit of £2,503,699 and profit before tax of £1,132,902 for the same period, with net assets as at that date of £1,881,994. NETELLER will retain all the existing employees of Netbanx and continue its operations at the existing Cambridge, UK, facilities.
The total consideration for the acquisition is £12.36 million which was paid in cash to the Vendor at completion. Of the net assets acquired, this included cash of £380,000.
As an already profitable company, the strategic acquisition of Netbanx is expected to be earnings enhancing in the first full year after acquisition. The acquisition brings the ability to process credit card transactions within the NETELLER Group, and is therefore expected to generate operational synergies in the first full year after acquisition.
Gord Herman, Chief Executive Officer, commented: 'The Netbanx acquisition represents a significant step in NETELLER's strategy to strengthen its position in the payment processing market. Netbanx will provide NETELLER with the ability to process its own credit card transactions, retaining a greater proportion of margin in-house, whilst also generating additional revenue opportunities by leveraging Netbanx's existing custoting customer and merchant base in the UK. The acquisition of Netbanx underlines NETELLER's position as a leading payment provider to the wider e-commerce sector.
We are pleased to welcome the Netbanx team to the NETELLER Group and look forward to making Netbanx an integral part of the NETELLER payment processing platform going forward. With over 1,700 online merchants serving more than 2 million customers in over 150 countries, NETELLER continues to make steady progress towards its goal of becoming the dominant global online money transfer service.'