A Canadian payment processor has agreed to acquire Fairfield-based bill payment solutions firm Softgate Systems Inc., the two companies announced Tuesday.TIO Networks Corp., based in Vancouver, will pay approximately $31 million in cash, stock and debt for Softgate, the companies said in a news release. The deal includes $5 million in cash, a $5 million promissory note, 25 million shares of TIO stock and assumption of about $2.5 million in debt.
“We’re very excited to welcome Softgate as well as its valued management, employees, partners and clients to the TIO family,” Hamed Shahbazi, TIO’s chief executive officer, said in a prepared statement. “TIO and Softgate have been commercial partners for more than eight years, and we have been very impressed with how the company has evolved and built a well-diversified national network of walk-in locations.
“This is a significant step for TIO and will be a launching point to bring our services to a much larger segment of the United States. TIO and Softgate was always a natural combination based on our cultural alignment and our years of commercial collaboration.”
TIO, which said it is North America’s leading cloud-based bill payment processor, said the deal would also make it the largest North American provider of walk-in bill payment services.
“We’re excited to join forces with TIO and create a new emerging competitor in the multichannel bill payment and receivables processing marketplace,” Rick Auletta, Softgate’s CEO, said in a statement. “We look forward to working with the TIO team to meet the growing financial needs of bill issuers across the country.”
The deal, which would create a company with revenue in excess of $100 million Canadian, is expected to close later this year, pending customary regulatory approvals and conditions.
Financial Technology Partners LP and FTP Securities LLC served as Softgate’s exclusive financial and strategic advisers for the transaction.
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