TORONTO: Quisitive Technology Solutions Inc. has entered into a stock purchase agreement to acquire BankCard USA Merchant Services for US$100 million in cash and the issuance of 50 million common shares in the capital of Quisitive, a news release said.

BankCard, an arm’s length party to Quisitive, is an established all-in-one merchant payment services provider with over US$3.0 billion of payment volume which increased 31% in 2020. 

BankCard USA has a seasoned payments industry management team, strong in-house sales team, deep risk management program and attractive recurring revenue model with card-not present volume representing approximately 70%.

The acquisition of BankCard will serve as a growth catalyst for Quisitive’s LedgerPay payment processing and payments intelligence platform.

BankCard has trailing-twelve months revenue of US$29 million and EBITDA of US$11 million as of September 30, 2020.

“The addition of BankCard USA to the Quisitive Payments Solutions family will bring our vision to life by combining a high-powered sales organization, robust risk management, and quality customer service with our innovative fintech platform, LedgerPay” said Quisitive CEO Mike Reinhart.

“It is partnerships like these that elevate a great product to industry-wide transformation. I am proud to say that with the addition of BankCard USA, Quisitive Payments Solutions will have the team, the technology, and the strategic vision in place to redefine modern payments at scale.”

“Bankcard USA is proud to join the Quisitive team and make an impact by integrating our go-to-market strategies and the strength of our sales organization with their fintech payments platform, LedgerPay, as it goes to market,” said BankCard USA CEO Shawn Skelton.

“We also bring a deep history in merchant services that will guide Quisitive Payments Solutions to take a white-glove approach, providing unique, high-value payment services to their customers, as Bankcard USA has for many years.”

Under the terms of the Agreement, consideration payable by Quisitive to BankCard shareholders includes 50,000,000 common shares of Quisitive and US$100 million in cash.

The shareholders may also be entitled to additional contingent consideration in the form of a performance earn-out if BankCard achieves certain financial thresholds during the two-year period following the closing of the Transaction. The amount of the earn-out is a maximum of US$20 million payable in a combination of cash and Common Shares.

BankCard shareholders have agreed to a 24-month lock-up agreement on the Common Shares with 25% of Common Shares released on each 6-month anniversary of the transaction.

As a condition to closing, Quisitive will also enter into employment agreements with key BankCard management. In connection with the issuance of the Common Shares on closing of Transaction, the Company intends to enter into a registration rights agreement with each of the shareholders of BankCard that will provide certain demand registration and piggy-back registration rights in favour of the shareholders.

The Transaction is being financed through a combination of new bank debt and equity. Quisitive has secured committed debt financing from a syndicate of Canadian banks pursuant to an amendment to the terms of an existing loan agreement to increase the maximum commitment under the existing term loan by US$50 million which shall be used to fund a portion of the Transaction.

Quisitive has also entered into an agreement pursuant to which Scotiabank, Eight Capital and Canaccord Genuity, as joint bookrunners, together with a syndicate of underwriters, will purchase on a “bought deal” basis 33,400,000 subscription receipts of the Company at a price of $1.50 per Subscription Receipt for aggregate gross proceeds to Quisitive of $50,100,000.

The Company has granted the Underwriters an option, exercisable, in whole or in part, at any time not later than the 30th day following the closing of the Offering, to purchase up to an additional 15% of the Offering at the Issue Price for market stabilization purposes and to cover over-allotments, if any.

Quisitive (TSXV: QUIS) is a premier, global Microsoft partner that harnesses the Microsoft platform and complementary technologies, including custom solutions and first-party offerings, to generate transformational impact for enterprise customers.   www.quisitive.com