A Silicon Valley giant has acquired a rapidly growing Vancouver-based financial tech firm that specializes in cloud-based, multi-channel bill payment processing and receivables management.
PayPal has purchased TIO Networks Corp. for CAD$3.35 per share in cash, or approximately CAD$304 million, according to a release. This is 7% above its closing price on the TSX earlier today and 25% over its 90-day average.
The deal is slated to close during the second half of 2017.
“We founded TIO to make speed and access part of the bill payment experience for the underserved, and we believe that we have created affordable products to serve the needs of all customers,” said Hamed Shahbazi, Chairman and CEO of TIO, in a statement.
“Our mission fits perfectly with PayPal’s vision to democratize money. As part of the PayPal team, we believe we will accelerate our growth through expanded distribution and continue increasing access to more billers and services.”
TIO processed more than USD$7 billion in consume bills throughout the 2016 fiscal year and serves 14 million consumer bill pay accounts. It has over 10,000 supported billers, about 900 operated self-service kiosks, and close to 65,000 retail walk-in locations that supplement mobile and web platforms. This allows customers to pay their bills while avoiding service interruptions and financial penalties from missed payment deadlines.
As a result of the acquisition, TIO’s systems will be merged with PayPal, providing the worldwide online payment system with bill payment capability. It will operate as a service within PayPal once the acquisition is closed.
“By acquiring TIO and integrating bill payment into our global payments platform, PayPal adds another key service in our efforts to become a part of a consumer’s everyday financial life,” said Dan Schulman, President and CEO of PayPal. “Worldwide, more than 2 billion people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment.”
PayPal has over 200 million active account holders and moved nearly USD$300 billion in currency last year.