- GreenBox has secured an estimated $1 billion merchant accounts portfolio following the closing of an asset purchase agreement with Sky Financial & Intelligence
- The company reported approximately $2 billion in total processing volume for the full year 2021, meaning the acquired portfolio formed a significant part of GreenBox’s growth success story during the last financial year
- Already, GreenBox has recouped $14.5 million of the purchase in the form of residuals received by Sky in FY21 and expects to recover the remaining amount in less than six months
- Last year, the company acquired Northeast Merchant Services and ChargeSavvy LLC, adding an impressive roster of merchant accounts
For GreenBox POS (NASDAQ: GBOX), an emerging FinTech company building customized payment solutions supported by proprietary blockchain security and advanced token technology, acquisitions are a vital part of its growth strategy. During a March 31 earnings conference call that accompanied the release of the Fourth Quarter and Full Year 2021 results, company Chairman Ben Errez noted that acquisitions allow GreenBox “to purchase merchant portfolios, adding processing volume to our platform, and provide a way to obtain key licensing assets, both domestically and globally, that enable us to branch out and service more verticals and geographic locations” (https://ccw.fm/bgVqi).
In an April 7 announcement that embodies Errez’s statement, GreenBox celebrated the closing of an asset purchase agreement with Sky Financial & Intelligence (“Sky”) to acquire a portfolio of merchant accounts for $16 million and 500,000 restricted common shares. There will be no additional compensation for Sky as GreenBox capitalizes on the strength of its own sales team for new account acquisition (https://ccw.fm/R0r28).
According to GreenBox, one of Sky’s accounts, which has been integrated with GBOX’s technology and ecosystem for more than a year, formed a significant part of its growth story in 2021. Over that period, the portfolio increased to over $1 billion in processing volume, against a total processing volume of approximately $2 billion for the full year 2021 (“FY21”). In recognizing this portfolio’s potential and continued growth, particularly considering its contribution to the processing volume for Q1 2021, GreenBox opted to purchase and wholly own it.
GreenBox further noted it had already recouped $14.5 million of the purchase price from residuals (profit contributions) received by Sky during FY21. As a result, the company observed, the cash outlay to purchase the merchant accounts portfolio in-house is roughly $1.5 million in cash. And based on the current rate generated by Sky’s portfolio residuals to GreenBox, the company expects to recover the balance in less than six months.
“The acquisition of the substantial Sky portfolios is yet another stride forward for us and accomplishes two very important things,” commented Errez. “[First,] by bringing a large merchant account portfolio in-house, we eliminate the cost previously incurred from commissions and amplify our margin profile. Second, it allows GreenBox to own these customer relationships, securing a considerable portion of our processing volume base with the bonus of being able to offer additional revenue-generating solutions. Lastly, Sky’s processing volume played a vital role for us in meeting the fundamental hurdle requirements in our convertible note.”
GreenBox’s recent purchase joins a number of similar acquisitions that now define its growth strategy. Last May, the company completed the acquisition of Northeast Merchant Services, a provider of comprehensive merchant credit card processing services, in a transaction that gave GBOX access to over 700 new retail merchant accounts (https://ccw.fm/ic33a). Later, in July, the company closed the acquisition of ChargeSavvy LLC, bringing an impressive merchant client portfolio and POS system equipped with fraud detection capabilities (https://ccw.fm/vi1Oj).
For more information, visit the company’s website at www.GreenBoxPOS.com.
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