TSX Venture Exchange: VSI
VANCOUVER, Dec. 18, 2013 /CNW/ - VendTek Systems Inc. (VSI - TSX
Venture) ("Vendtek" and the "Company"), a developer and licensor of
software for the global prepaid and financial services markets,
announces that it has entered into an asset purchase agreement (the
"Agreement") with Payment Source Inc. ("PSI"). PSI is wholly-owned by
George DeMarchi, the Company's current Senior Vice President of
Canadian Operations. Under the terms of the Agreement, the Company has
agreed to sell its Canadian business (assets and associated
liabilities) that constitute its Now Prepay division to PSI in return
for $4,500,000 and the assumption of up to $1,500,000 of working
capital deficit, excluding cash (the "Working Capital"), for total
consideration of up to $6,000,000. The Purchase Price will be paid as
(a) a deposit of $200,000, which has already been paid;
(b) a cash payment of $3,850,000 on closing; and
(c) a further $450,000, to be paid within 90 days following the closing
of the transaction.
The Purchase Price is subject to adjustment based on the Working Capital
of the Canadian business being either (i) less than -$1,500,000 at
closing, in which case the Purchase Price will be reduced by the amount
that Working Capital is less than -$1,500,000; or (ii) greater than
-$1,000,000 at closing, in which case the Purchase Price will be
increased by the amount that working capital is greater than
-$1,000,000. The adjustment will take place within 90 days following
the closing of the transaction.
The Company intends to use the proceeds from the sale for its ongoing
operations and to further its growth plans in Brazil. The Company
believes that its Brazilian operation holds tremendous potential. This
proposed transaction will allow the Company to focus its resources on
this important growth opportunity while simplifying its overall
operating structure. Over the long-term, Vendtek's strategy will be to
refocus on licensing its e-Fresh™ transaction processing software
internationally and move away from the direct operating model, while
retaining its established licensing relationships as we have done with
In connection with this transaction, PSI will license and use VendTek's
e-Fresh™ transaction processing software to manage its Canadian
operations for its suppliers and merchant customers under VendTek's Now
The transaction contemplated by the Agreement will require the approval
of the shareholders of the Company by way of a special resolution in
which two-thirds of the votes cast on the matter vote in favour of the
transaction. Such shareholder approval will be sought at an annual and
special meeting of shareholders expected to be held in late January
The board of directors has carefully considered all of the terms of the
proposed transactions and unanimously resolved to recommend that
shareholders approve all necessary resolutions to implement these
transactions. The Company will shortly issue a management proxy
circular which will describe the proposed transactions in more detail.
"We are pleased to be able to proceed with this transaction with George
DeMarchi's company, Payment Source", said Mr. Buchanan, President & CEO
of VendTek. "Throughout what was a thorough and competitive bidding
process, Mr. Demarchi demonstrated his knowledge of the business, along
with his experience and strong reputation within the Canadian prepaid
market. These factors became compelling reasons to select George as the
preferred acquirer and successor in interest to VendTek's Canadian
operations. Following George's resignation from VSI to be effective on
the closing date, we are looking forward to a smooth transition with
PSI. We wish George the very best in his new endeavour and are pleased
that we will be able to continue our business relationship," added Mr.
Completion of the transaction is subject to a number of conditions,
including receipt of all necessary shareholder, stock exchange and
regulatory approvals. The Company expects that an annual and special
meeting of shareholders will be held in late January 2014 and, if all
necessary approvals are received and all conditions are satisfied,
closing is expected to follow on or about January 31, 2014.
VendTek is headquartered in Vancouver, British Columbia, Canada, and
develops and licenses automated transaction system software and
supporting technologies that improve the efficiency of product
delivery, reduce costs to clients and offer superior safety measures.
VendTek's customers, its division, Now Prepay and its subsidiaries are
using e-Fresh™ software to build electronic, prepaid services networks,
which enable consumers to purchase prepaid services via point-of-sale
terminals (POS) and self-serve terminals connected to a central
e-Fresh™ server. This system creates significant value through improved
efficiencies compared to the traditional distribution paradigm.
e-Fresh™ reduces shrinkage and inventory requirements while improving
consumer access to prepaid services by completely eliminating physical
cards and vouchers. For further information please visit the Company's
websites www.vendteksystems.com and www.nowprepay.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: VendTek Systems Inc.
For further information:
For more information about this transaction, please contact Irwin Studen, Interim CFO at 1-800-806-4958 or firstname.lastname@example.org.
For more information about the Company, please contact Samantha White at 604-805-4653 or 1-800-806-4958 or email@example.com.