GreenBox POS, an emerging financial technology company leveraging proprietary blockchain security to build customized payment solutions announced it has entered into a binding MOU to purchase Transact Europe Holdings OOD. Transact Europe Holdings OOD is the single entity shareholder of Transact Europe EAD.
Transact Europe EAD (TEU) is an EU regulated electronic money institution headquartered in Sofia Bulgaria. TEU is a Principal Level Member of Visa, a Worldwide Member of MasterCard, and a Principal Member of China UnionPay. In addition, TEU is part of the direct SEPA program. With a global footprint, proprietary payment gateway and technology platforms, TEU offers a comprehensive portfolio of services, and decades of industry experience. TEU provides complete payment solutions by offering acquiring, issuing of prepaid cards and agent banking, serving hundreds of clients with a projected EBITDA for 2021 in excess of USD $5m.
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Under the terms of the agreement, the purchase price for the transaction is EUR 30M in cash with the majority of management equity earnout compensation (post acquisition) based on processing volume commitments and hurdles of $100M, $250M, $500M and $1B of new business volume per month. Included in the acquisition is over 6M Euro in reserves with the card schemes (Visa/MasterCard). TEU has successfully passported its licenses into all countries in the European Economic Area (EEA) which will allow GreenBox to onboard any customer within the EEA region.
With this acquisition, GreenBox will have the following capabilities as a result of TEU’s licensing:
- Principal Member of Visa and MasterCard for Acquiring
- Principal Member of Visa and MasterCard for Issuing
- Principal Member of China Union Pay for Acquiring
- Full Electronic Money Institution license (EMI license)
- A direct member of SEPA
- Able to issue and offer EUR IBANs
- Passport of licenses to all EEA Countries
- Waiver to continue boarding UK clients in 2021
- Software included to run licenses and clients
- Proprietary PCI Level 1 Payment Gateway
Upon completion, the European acquisition would reduce the impact of certain issuing and acquiring challenges faced by GreenBox during its growth in the U.S. market.
The acquisition will allow GreenBox to expand its offerings, including merchant accounts, payment accounts, FX services and a host of other services to prospective European clients. It will also provide GreenBox the opportunity to offer its domestic clients expansion into Europe, greatly enhancing value for its existing and prospective U.S. based clients.
Furthermore, Transact Europe holds a waiver from the UKFCA under Brexit to continue business in the UK for the remainder of 2021 until the needed requirements, which are expected to be released in October, are defined. GreenBox intends to achieve the required UK licensing in order to continue onboarding and servicing customers in the UK.
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The acquisition is pending regulatory approval from the Bulgarian National Bank, where TEU’s licenses are held, after which GreenBox can begin consolidation efforts and onboarding of new clients.
GreenBox has already secured the services of seasoned European based industry specialists to spearhead the European expansion to optimize all facets of the combined group.
“This is the most significant acquisition to date for GreenBox and propels the Company into the European marketplace,” said Ben Errez, Chairman of GreenBox POS. “By acquiring Transact Europe, GreenBox can swiftly move to gain market share in the global financial payments space where a void has left opportunity for new market entrants to emerge and dominate. Transact Europe represents the perfect acquisition for us to expand our global footprint and continue to deliver sustainable growth for our shareholders. We are looking forward to integrating the Transact Europe team as part of the GreenBox family.“
Vassil Klaklov, CEO of Transact Europe EAD, commented, “GreenBox is a natural complement to Transact Europe. Our licenses and infrastructure combined with GreenBox’s suite of solutions, global strategy and technology platform will create a power synergy that can quickly scale in the European market. We look forward to joining the GreenBox team and emerging as a leading global payment solutions company.”
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