Finally, EML (ASX:EML) acquired 74.86 per cent of Perfectcard DAC, Ireland’s first authorised eMoney institution and a FinTech company that provides incentive and corporate expense solutions. The total maximum acquisition price was decided as €6,023,841 (A$9,561,652) that comprised of an Upfront cash payment of €2,722,743 (A$4,321,814) which was paid on close from EML’s existing cash balances, and €250,000 (A$396,825) is held by EML (ASX:EML) pending satisfactory completion of representations and warranties for up to six months post close. The transaction is Earn-out based on 10x average EBTDA generated in CY19 and CY20, capped at €3,051,098 (A$4,843,013). The Earnout will be payable 82 per cent in cash and 18 per cent in EML (ASX:EML) shares with a price of A$1.36.
It has been decided that Perfectcard will be acquired with €1.5 million in net assets and it is expected that Perfectcard will be generating EBTDA of A$400k – A$600k in FY19 after first-year integration costs to terminate processing agreements, reissue plastic gift card stock and integrate with EMLs processing engine. Soon, EML (ASX:EML) will provide earnings guidance for the next financial year around the time of AGM and contributions from this acquisition will be factored into any guidance that it will provide at that time. Further, EML (ASX:EML) will consolidate Perfectcard into its financial results from 4 July 2018 onwards. The main rationale behind the acquisition is that now it will allow EML (ASX:EML) to become an Issuer, payment processor and program manager across the European Union. It will provide EML (ASX:EML) with capability, cost and revenue synergies. The stock was trading at $1.47 without any movement (as on 5 July 2018; 03:15 PM AEST).
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