Advanced payment (clearing) technologies company SafeCharge International Group plc (AIM: SAFE) has acquired Israeli payment solutions company CreditGuard Ltd. for $8 million cash and deferred consideration capped at $0.4 million (NIS 1.7 million), subject to customary closing adjustments. The acquisition is expected to complete in January 2015.
SafeCharge, controlled by Teddy Sagi, raised $126 million on London's AIM in March, and the latest purchase is part of the company's strategy of mergers and acquisitions.
CreditGuard, founded in 1998 is in a similar area of activity to SafeCharge. CreditGuard is a PCI-DSS Level 1 certified payment service provider (clearing license), offering cutting-edge payment solutions and white-label technologies. CreditGuard's highly secure payment gateway and reconciliation solutions streamlines and leverages electronic payment processes for a wide range of businesses, from enterprises to SMEs including major financial institutions; airlines; travel operators; government agencies; telecommunication operators; and healthcare providers, both in Israel and worldwide.
Despite its relatively veteran status, CreditGuard has never really taken off. CreditGuard's had revenue of $2.9 million (NIS 11.5 million) in 2013, EBITDA of US$0.5 million (NIS 1.8 million) and pre-tax profit of $0.2 million (NIS 0.8 million).
SafeGuard was founded in 2006 and was Sagi's second London IPO after online gambling platform Playtech Cyprus Ltd. (LSE:PTEC). At its IPO in March, the company's share was trading for £1.62, and it has since risen to £2.54, giving the company a market cap of $600 million, 57% up from its IPO.
SafeGuard was founded in 2006 after receiving its PCI-DSS Level 1 certified payment service provider license. Is subsequently acquired Austrian e-commerce company XT Commerce, which made it one of Europe's leading clearing companies. SafeCharge focuses on the online gambling industry and provides services to leading bookmakers including Gala Coral, Rank Digital Gaming and even former Playtech partner William Hill.
SafeCharge clears payments for the major credit card companies Visa, MasterCard, and American Express.
In explaining its rationale for the purchase, SafeGuard said, "Israel is widely recognized as a technology hub that has multiple online and mobile businesses. CreditGuard has an extensive portfolio of tier one customers to whom SafeCharge can now offer its technologies and international reach."
"By acquiring the CreditGuard business, the Group will expand its customer portfolio which will support its push into new sectors such as telecommunications, airlines, travel, insurance and government. CreditGuard's technology serves multiple international card scheme members providing gateway technologies, risk management and fraud prevention."
SafeCharge CEO David Avgi said, "CreditGuard is highly regarded within the payments industry, with a solid portfolio of clients across multiple market sectors and a vast knowledge and expertise in Enterprise IT infrastructures, networks and security. This enables us to fast-track our entry into new verticals and take a strong position in the exciting Israeli market."
Published by Globes [online], Israel business news - www.globes-online.com - on December 14, 2014
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