icash Payment Systems Limited ABN

Transcription

1 icash Payment Systems Limited ABN ASX Release 24 December 2014 HIGHLIGHTS icash SIGNS LEGALLY BINDING HEADS OF AGREEMENT TO ACQUIRE STARGROUP LIMITED icash signs an exclusive, binding heads of agreement to acquire 100% of Australian unlisted end-to-end ATM deployment and electronic payment services provider, Stargroup Limited. Following completion of the Stargroup acquisition, experienced ATM entrepreneur and former Ezeatm Limited director, Mr Todd Zani, will become the CEO and Executive Chairman of icash. Two other Stargroup Directors will join the icash board and two icash Directors will resign. The transaction is subject to icash shareholder approval. Purchase consideration comprises 91,666,667 fully paid ordinary icash shares. icash shareholders will be given the opportunity by way of an equal access scheme buy-back to swap their icash shares for direct holdings in NeoICP shares, up to a cap of 40.2 percent of icash s shares on issue. The acquisition of Stargroup remains subject to certain conditions precedent, and is expected to be completed in March Stargroup is undertaking a pre-acquisition placement of $3 million. BACKGROUND Further to our announcement to market on 21 November 2014, icash Payment Systems Limited (ASX:ICP, icash or the Company ) is pleased to announce that it has signed an exclusive, binding Heads of Agreement ( HoA ) to acquire 100% of Stargroup Limited ( Stargroup ), an Australian end-to-end ATM deployment and electronic payment services provider with ATMs deployed in Western Australia, Queensland and New South Wales. icash Payment Systems Limited ABN Tel: (+61 2)

2 Stargroup has 50 ATMs deployed and is processing 480,000 annualised transactions. The combined networks of icash and Stargroup will be 80 ATMs that will process 580,000 annualised transactions. The merged entity would also aim to explore value-adding payment processing systems. icash and Stargroup executed a non-binding, exclusive Memorandum of Understanding regarding the acquisition, as announced to the ASX on 21 November The parties have now agreed a legally binding, exclusive, conditional HoA. Completion of the acquisition will result in the appointment of three new Directors and the resignation of two existing Directors. Former CEO and Managing Director of Ezeatm Limited, Mr Todd Zani will become icash CEO and Executive Chairman. Mr Zani was the founder of Ezeatm in 2000 and subsequently vended that business into Ezeatm Limited in 2011, which was the third most successful float of 2011 and became the largest ASX-listed ATM deployer in ACQUISITION TERMS The key terms of the acquisition are as follows: The transaction, if effected, would involve an equity swap by icash with 91,666,667 fully paid ordinary shares to be issued by icash to Stargroup shareholders at an issue price of $0.06 per icash share for all Stargroup shares on issue, the placement of 8,333,333 icash shares to NeoICP, Inc. (NeoICP) and the buy-back by way of an equal access scheme of up to 30,877,200 icash shares in exchange for 2,200,000 NeoICP shares held by icash. The HoA provides that the transaction is subject to mutual due diligence, shareholder approvals and the execution of legally binding acquisition documents. An independent expert s report will also be prepared for the benefit of members where required. As part of the transaction, it is proposed that: Stargroup pre-merger will raise $3 million by the issue of 30 million Stargroup shares at an issue price of $0.10 each icash will raise $500,000 by the issue to NeoICP of up to 8,333,333 icash shares at an issue price of $0.06 each

3 icash shareholders will be afforded an opportunity to swap their icash shares for a direct shareholding in NeoICP, with up to 2,200,000 NeoICP shares to be distributed to accepting icash shareholders in consideration for up to 30,877,200 cancelled icash shares icash will, subject to shareholder approval, enter into formal bonus agreements with Stargroup personnel whereby icash must issue further performance shares to Stargroup s nominated key management personnel, which over time of achievement of specified targets, convert to icash shares on the following basis: 2.5 million shares on deployment of 250 ATMs and $2.5 million annualised revenue achieved by ICP by 31 Dec 2016; 2.5 million shares on deployment of 500 ATMs and $5 million annualised revenue achieved by 30 June 2017; 2.5 million shares on deployment of 750 ATMs and $10 million annualised EBITDA (earnings before interest, taxes and amortization) by 30 June 2018; and 2.5 million shares on deployment of 1,000 ATMs and $15 million annualised EBITDA (earnings before interest, taxes and amortization) by 30 June Stargroup will procure the agreement of all major Stargroup shareholders to enter into voluntary escrow agreements with icash for a period not exceeding 12 months, subject to ASX guidelines and approval. The Board will be restructured with the appointment of three new Directors, Mr Zani as CEO and Executive Chairman, former Ezeatm Limited Director, Mr Zaffer Soemya as a Non-Executive Director and current Stargroup Managing Director, Mr Shaun Sutton as an Executive Director. Mr Sungki Lee will remain as a Non- Executive Director and the Company Secretary and Mr Steave Ham will remain as an Executive Director. icash will procure the resignation of current Board members Mr Jong Ho (Jay) Kim and Mr Ghi Jin Kim. CHANGE OF NAME As part of the transaction, icash intends to change its name to Stargroup Limited and its ASX code to STL.

4 NOTICE OF MEETING icash will provide shareholders with a detailed notice of meeting seeking approval for the proposed transaction. The notice of meeting will contain detailed information including on the business of Stargroup and an independent expert s report regarding relevant resolutions. EFFECT OF THE TRANSACTION The indicative capital structure post completion of the transaction is outlined below: ASX: ICP Shares Existing shares 76,784,631 Equal access scheme buy back (30,877,200) icash capital raising from NeoICP 8,333,333 Subtotal : Shares pre-transaction 54,240,764 Shares to Stargroup shareholders 91,666,667 Total 145,907,431 If the proposed transaction is effected: the Company s projected consolidated total assets at 30 June 2015 would be $7,532,254; the Company s projected annual revenue for the financial year ending 30 June 2015 would be $1,311,485; and the Company s projected annual profit (loss) before tax and extraordinary items for the financial year ending 30 June 2015 would be ($1,651,077).

5 INDICATIVE TIMETABLE The indicative timetable is set out below, noting that the Company reserves the right to alter the timetable if required. Event Date Dispatch Notice of Meeting to approve transaction 19 February 2015 General Shareholder Meeting to approve transaction 24 March 2015 Dispatch Holding Statements to Stargroup shareholders 31 March 2015 VIEWS OF THE PARTIES The Board of icash recently met with the Board of Stargroup in Sydney to finalise the agreement. Mr Steave Ham, Executive Director of icash, said that: icash is excited to execute a heads of agreement to merge with Stargroup Limited and to have Mr Todd Zani become the Chairman of the Group. He has a proven track record of building significant ATM networks in Australia and through both icash and NeoICP we have had a strong customer/supplier relationship for many years. I am extremely proud that we will now be working together on the same team. Stargroup s average monthly number of transactions per ATM is significantly better than industry best practice. I believe that this agreement will see significant benefits to our shareholders and furthers our commitment to become the largest ASX-listed ATM and payment services provider in Australia. Mr Todd Zani, Executive Chairman of Stargroup, commented: We are extremely pleased to announce this merger with icash to become the exclusive distributor of NeoICP manufactured products, parts and software in Australia and New Zealand. When I visited Korea in 2012 I was excited to see the technology and products manufactured by NeoICP. They are world leading and this has been proven by their recent expansion into the Asia-Pacific market with its back office, coin and note handling solutions, including for the casino and gaming markets. I am really looking forward to bringing these highly customisable technologies more widely to Australia and New Zealand, with a view to further extending our coverage into international markets.

6 For further information, please contact: Sungki Lee Company Secretary icash Payment Systems Limited Tel : +61 (0) Todd Zani Executive Chairman Stargroup Limited Tel : +61 (0) Important note This announcement contains or may contain forward-looking statements that are based on the Board s beliefs, assumptions and expectations and on information currently available to management. That information includes information provided to the Company by the management of its subsidiary, NeoICP Korea, Inc which has not been independently verified. All statements that address operating performance, events, or developments that the Company expects or anticipates will occur in the future are forward-looking statements, including without limitation the Company s expectations with respect to potential revenues, costs, profitability and financial performance. The Board believes that forward-looking statements are reasonable as and when made.