Telerecarga specializes in the electronic distribution of prepaid wireless airtime and other prepaid products through point-of-sale terminals in Spain. Euronet said the acquisition is valued at 38m euros at the close of the transaction, with the company expected to pay a remaining 15m euros at the start of May.
Euronet has also acquired substantially all of the assets of Dynamic Telecom, a prepaid services vendor which specializes in wireless top-up, long distance calling cards and financial services products via point-of-sale terminals in convenience store retail chains across the US. Its assets were purchased on an earn-out basis, which will be calculated based on certain 2005 performance criteria, currently estimated to be between $7m and $10m.
In a transaction closed in May 2004, Euronet purchased 10% of ATX Software, a UK-based provider of electronic prepaid voucher products. According to the announcement, Euronet has now exercised its option to purchase an additional 41% of the shares of ATX for 8m euros.
We are capitalizing on the growing prepaid market, and our acquisitions in the prepaid sector allow us to significantly expand our presence in some of the leading and emerging electronic top-up markets in the US and Europe, said Michael Brown, Euronet CEO.
The acquisitions of Telerecarga, ATX and Dynamic Telecom enable us to leverage the combined expertise of these established companies in their respective regions and reinforce our position as the largest multinational provider of prepaid processing, or top-up services, for prepaid mobile airtime, he noted.
The company added that it expects the acquisitions to contribute approximately $0.01 to $0.02 incremental per quarter to its fully diluted earnings per share, beginning in the second quarter 2005.
