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Monday, December 10, 2012

UBPS expects approval for triple acquisition

Stockholders of Universal Business Payment Solutions Acquisition Corporation (UBPS) are expected to give final approval to the corporation's $179 million acquisition of three payment companies. The vote will take place at the company's annual stockholders' meeting Dec. 11, 2012.

In July 2012, UBPS first reported its plan to purchase Cleveland, Ohio-based ISO Electronic Merchant Systems; payment processor JetPay LLC of Carrollton, Texas; and Allentown, Pa.-based payroll processing and tax filing company AD Computer Corp.

Payments industry veteran Bipin C. Shah is Chairman and Chief Executive Officer of UBPS. He was formerly the CEO of Genpass Inc., where he led the development of a surcharge-free ATM network. Since Genpass was sold in 2005, Shah has been a private investor with an emphasis on payments.

One-stop solution planned

Shah said the aim of the acquisitions and consolidation is to provide small business owners with one-stop shopping for business processing solutions. "We believe this all-encompassing business processing model offers a unique solution not currently available to small business customers," he said.

Shah said the structure of the acquisitions is "internally friendly" for the three companies. UBPS is paying approximately $179 million for the combined acquisition of EMS, JetPay and AD Computer. The company is paying out $104 million in cash, $38 million in common stock and the balance in future cash and stock payments.

"The market for payroll processing, card processing and funding is still relatively fragmented, with the majority of small businesses utilizing separate resources for each," Shah said when reporting the acquisition plan. "We feel that by combining these three companies, we can address this market by providing a complete turnkey business processing solution for customers and doing it efficiently."

Further expansion planned

Combining the three companies on one platform will allow UBPS to maximize scale by at once giving merchants access to services including debit and credit card processing, funding related to receipts for said processing, payroll processing, accounts payable, and stored valued card products. The company said it also plans to add new products to the platform.

In 2011, EMS reported $40 million in revenue and 16,000 customers; JetPay had $17.5 million in revenue and 2,600 customers; and AD Computer reported $12.6 million in revenue and 4,800 customers. Combined 2012 figures for the companies are projected at $78.9 million in revenue and 26,000 customers.

UBPS also told investors in a July 2012 presentation it expects to make more acquisitions in both the payroll and merchant processing industries. The company said it is additionally looking for acquisitions that will boost its earnings per share.

The acquisition transactions are expected to close Dec. 28, 2012, a company spokesman said. Until then UBPS executives are declining comment to comply with legal restrictions, a company spokesman said. end of article

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