TORONTO: Australis Capital Inc. (AUSA) has entered into an agreement to acquire Passport Technology Inc., leveraging Passport’s international footprint in brick and mortar casinos with AUSA’s Cocoon Technology serving cannabis dispensaries in North America and AUSA’s Paytron Merchant Services.
In connection with and contingent on completion of the Passport Acquisition, AUSA also announces a non-brokered private placement of units of the company.
Passport and Cocoon Technology operate in highly regulated compliance centric environments with growth driven by emerging markets, demographic shifts, and evolving technology. This consolidation adds a unique fintech business to AUSA’s portfolio of assets, poised to capture significant market share through the Platform-as-a-Service (PaaS) technology stack delivering recurring revenue through long-term exclusive agreements and highly scalable profitability.
Passport and Cocoon Technology’s PaaS resides in the cloud and is easily duplicated to new jurisdictions and markets. The platforms are purpose-built ensuring data analytics, privacy, security, and regulatory compliance are cornerstones emboldening customer confidence.
Closing consideration for the proposed transaction includes 58,651,552 of AUSA common shares valued at $12.2 million based on a 15 day trading volume weighted average, $9.6 million cash; $3 million payable from AUSA’s holdings of shares of Body and Mind (BaM) and $6.6 million payable in real property (or cash if the real property is sold prior to closing).
If the company achieves over $7 million in revenue in 2021, Passport shareholders will be entitled to $2 million in shares of AUSA and BaM. If the company achieves over $8 million in revenue in 2021, Passport shareholders will earn an additional $2 million in shares of AUSA and BaM. In addition, as long as EBITDA in 2021 is above $3 million, Passport shareholders will receive 25% of revenue in excess of $7 million in 2021.
“Passport provides immediate revenue and profitability to AUSA with significant growth opportunities and Passport shareholders enthusiastically support the proposed acquisition and are happy to accept almost half the consideration in AUSA stock. Passport shareholders are committed, excited, and all-in on AUSA’s long term growth trajectory,” states Scott Dowty, the CEO of AUSA and Chairman of Passport.
“The acquisition of Passport allows AUSA to maximize development efforts in these and other high barrier to entry verticals pushing the envelope on unattended kiosk and omnichannel technology, solving pain points for industries through a solution and sales-oriented culture,” states Cleve Tzung, Chief Revenue Officer of AUSA.
“With the acquisition of Passport and growth in the Cocoon Technology and Paytron business lines, AUSA expects to be EBITDA positive in 2021 with exciting growth prospects beyond.”
AUSA invests in, operates and builds transformative, differentiated companies operating in highly regulated industries. AUSA offers proprietary unattended hardware and software technology to industries with the highest regulatory compliance standards along with supporting payment and fulfillment services. The globally available kiosk platforms are purpose-built in the cloud to deliver custom solutions in complex environments while emboldening customer confidence with features including data analytics, privacy, security, and regulatory compliance.
The Platform-asa-Service (PaaS) technology delivers recurring revenue through long-term exclusive agreements focused on regulated retail environments and casino gaming while portable and scalable to profitably support organic growth and complementary acquisition opportunities.