RE:Beacon Securities Report What's going on with QUIS is only the tip of the iceberge. More things to come. Be patient.
savyinvestor333 wrote: Quisitive Technology Solutions, Inc. (QUIS – V) May 07, 2021 Closes Transformative Bankcard USA Acquisition - Quisitive announced that it has closed its previously announced acquisition of BankCard USA Merchant Services. We had previously modeled this acquisition to close by end-Q2. However, we will refrain updating our estimates until the upcoming release of Q1 2021 results (expected later this month).
- As a reminder, Quisitive is paying US$100M in cash plus 50M shares for Bankcard, which generated CY20 revenues (recurring) and EBITDA of $31.4M and $11.3M respectively. - As previously noted, we believe this this acquisition is transformative for Quisitive and is expected to significantly accelerate the growth profile of Quisitive’s new LedgerPay payment processing / business intelligence platform.
- Recall that Bankcard is a leading independent sales organization/merchant services provider (“ISO”). That is they offer payment processing solutions to merchants leveraging third party providers (e.g. Global Payments, Chase Merchant Services, Wells Fargo, etc).
- By acquiring Bankcard, Quisitive acquires a direct sales and marketing channel to accelerate LedgerPay’s organic growth profile. It also has the opportunity to move Bankcard’s merchant customers (~7,000 of them) to the LedgerPay payment processing platform (once it is fully commercial), which should drive strong margin accretion (about 35 - 40% increase to Bankcard’s current EBITDA run-rate).
- Quisitive will also have the opportunity to upsell LederPay’s payment intelligence solutions (i.e. gaining visibility into every customer’s brick and mortar purchase behaviour, which will help to drive personalized promotions at the point-of-sale), which Quisitive will charge on a per transaction basis.
- Ultimately, we believe the Bankcard acquisition will be the first of many ISO-related acquisitions within Quisitive’s payment processing division as a way to quickly scale its merchant customer portfolio.
- The next news catalyst for Quisitive should be the definitive agreement with a major merchant acquiring bank as a sponsor for direct payment processing for Visa, MasterCard, and other major credit and debit card brands (an LOI has already been signed). We also expect news around potential LedgerPay pilot projects with large merchants specifically around payments intelligence. - We reiterate our Speculative Buy rating and C$2.00 target price.