Net Element, Inc. (NASDAQ: NETE), a provider of global mobile payment technology solutions and value-added transactional services, announced today the entry into a binding letter of intent to acquire a majority interest in PayStar, Inc., a comprehensive remittance and e-wallet platform for emerging markets and Nexcharge, Inc., a proprietary payment processing, fraud management and merchant management platform.
It is contemplated that Net Element together with PayStar and Nexcharge will create one or more entities into which PayStar and Nexcharge will contribute all their assets, with Net Element owning a 51% interest in the newly created entities. Pursuant to the terms of the agreement, Net Element will have the irrevocable sole and exclusive option to acquire the remaining 49% interest in the newly created entities during the 12 months from the closing of the transaction.
PayStar delivers a Software as a Service solution to financial institutions for their payroll and merchant management services. PayStar introduced its mobile remittance system in the Gulf Cooperation Council region, targeting a booming migrant worker population. PayStar aims to expand its mobile payroll and remittance services throughout the Middle East, starting with Qatar, United Arab Emirates, Oman and Saudi Arabia ("KSA"). In these markets PayStar has contracted with Commercial Bank of Qatar United Limited and National Bank of Oman, which positions PayStar to market its services to more than 15 million migrant workers. In addition, PayStar has contracts with Habitat Bank in Tunisia, Morocco and Algeria as well as Philippines National Bank in Philippines, Indusind Bank in India and ThamelRemit in Nepal. PayStar's mobile payments capabilities are available in KSA, through contracts with Mobility, a leading mobile network operator with an installed m igrant customer base of 7+ million subscribers.
Nexcharge transaction processing platform was developed to make it easy for acquiring banks and Payment Service Providers ("PSPs") to connect with merchants in a secure, stable processing environment. It also allows merchants the ability to connect to numerous acquiring banks and PSPs in a convenient fashion without additional application requirements. Once Nexcharge has approved a merchant, that merchant is automatically approved within the network of integrated providers. In most cases the merchant will be unaware of the identity of the acquiring bank assisting with the transactions. The Nexcharge platform has adopted the Payment Card Industry Data Security Standard Level 1 (PCI DSS) with increased controls around cardholder data to reduce credit card fraud via its exposure.
The successful closing of these acquisitions will allow Net Element to cross-sell its products and services while deploying PayStar and Nexcharge technologies and services in selected emerging markets.
"These acquisitions will allow Net Element to present transactions for processing directly to Visa, MasterCard, American Express and other networks, as well as expand our presence in GCC region and other selected markets," commented Oleg Firer, CEO of Net Element. "These acquisitions will add to the growth of our business and increase market share internationally."
"We are extremely excited about this opportunity. Positioning our companies on Net Element's worldwide platform utilizing our in-demand technologies allows Nexcharge and PayStar the opportunity to extend and grow into those market verticals that Net Element has already penetrated," states Christopher Berlandier, Founder.
Terms of the proposed acquisitions are disclosed in Net Element's Form 8-K, which was filed with the Securities and Exchange Commission (SEC) on July 21, 2016, and may be obtained from the SEC's Internet website athttp://www.sec.gov.
Closing of the acquisitions is subject to Net Element's satisfactory completion of due diligence, definitive documentation and other customary closing conditions.
About Net Element
Net Element, Inc. (NASDAQ: NETE) operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise ("SME") in the US and selected emerging markets. In the US it aims to grow transactional revenue by innovating SME productivity services such as its cloud based, restaurant point-of-sale solution Aptito. Internationally, Net Element's strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions such as UAE, Kazakhstan, Kyrgyzstan and Azerbaijan where initiatives have been recently launched. Further information is available at www.netelement.com.
