RE:Halt Trading 2020-10-02 10:50 ET - News Release
Publishing Company to acquire ecommerce processing capabilities with latest acquisition
- Varipay Inc. to become a wholly-owned subsidiary of MediaCentral
- Acquisition will increase revenue opportunities for MediaCentral's eCommerce platform linked to Company's popular digital media sites
- Acquisition of profitable business that is experiencing rapid growth in its market
- Varipay is poised to capitalize on rapidly emerging segments complementary to MediaCentral's digital focus including ESports, gaming, and Cannabis
TORONTO, ON / ACCESSWIRE / October 2, 2020 / Media Central Corporation Inc. (CSE:FLYY)(FSE:3AT) ("MediaCentral" or the "Company") announces that on October 1, 2020, the Company has entered into a non-binding letter of intent ("LOI") to acquire Varipay Inc. ("VP" or "Varipay"). The LOI represents a strategic acquisition to boost MediaCentral's aggressive eCommerce initiative bolstering sales and marketing synergies across all digital platforms.
Varipay is a digital payment processing company with established clients in industries such as Pharmaceuticals, Nutraceuticals, Cannabis and CBD, Healthcare and Media. Varipay currently offers ecommerce integration, POS retail processing and virtual terminals to its merchants. Varipay is expected to launch its mobile app in Q4 2020. The mobile app will provide customers with peer to peer funds transfer capabilities with full integration into retail environments and ecommerce websites. In F2019, Varipay processed $15.56-million in transactions generating total revenue of $1.65-million and $27K EBITDA. For the six months ended June 30, 2020, VP processed $9.50-million in transactions generating revenue of $1.23-million, compared to $5.16M and $438K, respectively, in the first half of 2019. Resulting year over year growth was 83.9% in transaction volumes and 127% growth in revenue. During the same six-month period Varipay achieved EBITDA of $193K compared to an EBITDA loss of $144K in 2019.
"The Company's previously announced acquisition of Budtree.com will not be proceeding.", said Brian Kalish, CEO of MediaCentral. "We have, however, developed another, more favourable opportunity, presented by the same Budtree.com vendors. Varipay is a building block to enhancing our in-play eCommerce strategy - across all of our digital platforms. The strong profile of its growing revenue and profitability should significantly enhance shareholder value."
MediaCentral expects to integrate Varipay into its eCommerce platforms and popular digital media sites which include: Toronto's Now Magazine, Vancouver's Georgia Straight, CannCentral.com and ECentralSports.com.
MediaCentral and Varipay will work to entering into a definitive agreement within 30 days subject to completion of mutual due diligence, a comprehensive business valuation report of Varipay, financial audit of Varipay, regulatory approvals, and consent from certain of MediaCentral's significant shareholders, It is expected that the acquisition will be by way of a share exchange which will result in Varipay becoming a wholly-owned subsidiary of MediaCentral. Based on the projected twenty-day volume weighted average price of the Company's stock, on closing, MediaCentral is expected issue approximately 200,000,000 shares to the shareholders of Varipay in exchange for their shares in Varipay.
On the successful closing of the transaction, the shareholders of Varipay will nominate two individuals to join MediaCentral's Board of Directors. A finder's fee of up to 6% of the value of the transaction may be payable following the closing of the acquisition.