TIDMESG
RNS Number : 9261V
eServGlobal Limited
18 December 2013
Press Release
MasterCard, eServGlobal and BICS Create Remittance Joint
Venture
HomeSend JV to Expand Options for Consumers to Send and Receive
Money Worldwide
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#MasterCard, #eServGlobal and #BICS
PURCHASE, NY, December 18, 2013 - MasterCard (NYSE: MA),
eServGlobal (LSE: ESG.L, ASX: ESV.AX) and BICS today announced the
formation of HomeSend, a joint venture (JV) which will enable
consumers to send money to and from mobile money accounts, payment
cards, bank accounts or cash outlets - regardless of their location
or that of the recipient.
The HomeSend JV will leverage the current HomeSend platform, a
remittance hub based on eServGlobal technology and developed as
part of a strategic partnership between eServGlobal and BICS. The
HomeSend platform was first to market in offering international
mobile remittances. Today, HomeSend has live deployments in 50
countries and commercial contracts with mobile network operators
(MNOs) and money transfer operators (MTOs) that represent more than
1.2 billion subscribers - the equivalent of one in seven of the
world's population - and 200,000 cash agents respectively.
By connecting the worldwide community of telecom partners and
MTOs to the more than 24,000 financial institutions on the
MasterCard network, the HomeSend JV will provide consumers new
options and flexibility for sending or receiving funds and enable
cross border remittance payments worldwide. For people in
developing markets, the receipt of funds from friends and family is
an important lifeline. Based on World Bank estimates, remittances
to developing countries will reach around $515B by 2015.
"HomeSend will provide an important platform to deliver improved
remittance services, and bring person-to-person transfer
capabilities to more financially underserved consumers around the
globe," stated Ed McLaughlin, Chief Emerging Payments Officer at
MasterCard. "MasterCard, eServGlobal and BICS each brings its own
unique contribution to the newly formed entity. Collectively, we
have an opportunity to improve people's lives."
"This is a significant development for the global money transfer
industry and we are delighted to be part of this new venture," said
Paolo Montessori, CEO and Managing Director of eServGlobal. "This
combination creates one of the most comprehensive offerings in the
market, and we believe will be an important step in the journey to
extending cost-effective and easy-to-use financial services to
people worldwide."
"We are very happy to be part of this significant milestone for
the mobile financial services industry, and believe this type of
service can open up new remittance corridors and expand the scope
of money transfers around the world," added Daniel Kurgan, CEO of
BICS.
MasterCard will own a controlling share of the HomeSend JV.
About MasterCard
MasterCard (NYSE: MA), www.mastercard.com, is a technology
company in the global payments industry. We operate the world's
fastest payments processing network, connecting consumers,
financial institutions, merchants, governments and businesses in
more than 210 countries and territories. MasterCard's products and
solutions make everyday commerce activities - such as shopping,
traveling, running a business and managing finances - easier, more
secure and more efficient for everyone. Follow us on Twitter
@MasterCardNews, join the discussion on the Cashless Pioneers Blog
and subscribe for the latest news on the Engagement Bureau.
About eServGlobal
eServGlobal (LSE: ESG, ASX: ESV) offers mobile money solutions
which put feature-rich mobile financial services at the fingertips
of users worldwide, covering the full spectrum of mobile wallet,
mobile commerce, recharge and agent management features.
eServGlobal invests heavily in product development, using
carrier-grade, next-generation technology and aligning with the
requirements of more than 100 customers in over 65 countries.
eServGlobal also offers a comprehensive suite of sophisticated,
revenue generating Value-Added Services to engage subscribers in a
dynamic manner. These services can be seamlessly integrated with
our mobile money portfolio to extend loyalty and promotion offers.
eServGlobal has been a source of innovative solutions for mobile
and financial service providers for 30 years. Follow us on Twitter
@eServGlobal.
About BICS
BICS delivers best-in-class international wholesale solutions to
any communication service provider worldwide. Through its Mosaic
portfolio, a comprehensive, flexible and innovative suite of
solutions designed to be used individually, or collectively, BICS
meets the existing and future requirements of the global telecoms
industry.
BICS' headquarters is located in Brussels with regional offices
in Bern, Dubai, New York and Singapore. We have also local
representation in Accra, Beijing, Cape Town, Miami, Montevideo and
Nairobi. Our team continuously strives to provide our customers
with the highest levels of quality, reliability and
interoperability enabling them to maximise their end-user
value.
With our successful consolidation strategy, and a continuing
focus on technological advancement and innovation, we have achieved
a world-leading position in the international Voice and Mobile Data
markets.
Media Contact:
Brian Gendron, 914-249-1284, brian_gendron@mastercard.com
Investor Relations Contacts:
MasterCard: Barbara Gasper, 914-249-4565,
investor_relations@mastercard.com
eServGlobal: Alison Cheek, +33 6 7003 9078,
alison.cheek@eservglobal.com
# # #
Annexure
Transaction Summary Under the terms of the agreement, eServGlobal and
BICS will each contribute or make available all
of their assets, including staff, that are directly
related to the existing HomeSend business to a
newly formed company ("NewCo").
In consideration for the transfer of assets, eServGlobal
will receive EUR9m in cash (EUR3.45m subject to
escrow for 2 years). MasterCard will contribute
additional capital to NewCo to meet the estimated
working capital requirements of NewCo for the medium
term.
Following the transaction, MasterCard will own
55% of NewCo, eServGlobal will own 35% and BICS
will own 10%. Based on the initial shareholdings,
MasterCard will be entitled to appoint three directors
to the Board of NewCo, eServGlobal will be entitled
to make two appointments and BICS will be entitled
to appoint one director.
In addition, MasterCard will enter into a commercial
agreement with HomeSend which will have an initial
duration of three years and automatic yearly renewal
thereafter. The commercial agreement will require
MasterCard to use its best endeavors to promote
the HomeSend service utilising MasterCard's sales
channels.
--------------------- ----------------------------------------------------------
Financial Impact The payment to be received by eServGlobal will
provide additional working capital for its core
mobile money business and the core business will,
following completion of the transaction, see an
immediate positive cash flow impact as HomeSend
operations (estimated at EUR1.0M (AUD$1.5M) being
the direct costs of eServGlobal staff transferring
to NewCo) are transferred to NewCo.
There will be a positive movement in the net assets
of eServGlobal of approximately EUR24.9M (AUD$37.6M)
on creation of the HomeSend JV as the disposal
of the HomeSend intellectual property and associated
goodwill (approximately EUR5.1M (AUD$7.7M) as at
31st October 2013) will be more than offset by
the value of eServGlobal's interest in the HomeSend
JV.
As a result of the transfer of assets to the HomeSend
JV, eServGlobal will recognise a gain on disposal
of between EUR23.5M - EUR24.2M in FY2014 (consideration
of EUR30.0M less assets classified as held for
sale of EUR5.1M and estimated selling expenses).
--------------------- ----------------------------------------------------------
Conditions Precedent Completion of the transaction is subject to the
satisfaction of certain conditions precedent including
merger clearances, certain third party consents
and transfer of relevant employees to NewCo and
standard pre-closing conditions in relation to
breach of warranties and material adverse change.
eServGlobal does not consider the transaction to
be one to which ASX Listing Rule 11.1 applies and
does not intend to obtain shareholder approval
for the transaction.
--------------------- ----------------------------------------------------------
Law NewCo will be incorporated in Belgium and the JV
agreements shall be subject to Belgian law.
--------------------- ----------------------------------------------------------
Warranties and eServGlobal has provided warranties and indemnities
Indemnities in relation to, inter alia, its HomeSend intellectual
property and the assets to be transferred. The
majority of warranties are limited to EUR4.6M (the
total amount held in escrow on account of eServGlobal
and BICS) plus, in respect to some specific warranties
which include the intellectual property warranties,
an additional EUR2M. The warranty period aligns
with general periods of limitation of claims.
---------------- ---------------------------------------------------------
Other Key terms MasterCard may acquire eServGlobal's interest in
the HomeSend JV at fair market value if there is
a change of control of eServGlobal. For these purposes
change of control includes a person (acting alone
or with another person) acquiring 30% or more of
the voting power in the ultimate parent company
of eServGlobal or the right to appoint the majority
of its directors.
With limited exceptions in relation to MasterCard,
no NewCo shareholder may engage in activity with
a remittance hub service similar to HomeSend.
MasterCard may drag along eServGlobal if MasterCard
is selling all its shares in NewCo to a bona fide
third party arm's length purchaser. eServGlobal
can tag along pro rata if MasterCard takes its
interest in NewCo below 25%.
Management of the HomeSend JV is generally reserved
to the Board and the CEO appointed by the NewCo
Board. eServGlobal has veto rights over some management
matters which, if exercised, then require approval
of the holders of two thirds of the NewCo shares.
BICS also has veto rights requiring unanimous approval.
MasterCard may override eSG triggered deadlocks
after the first 18 months by acquiring the minority
shareholdings at fair market value. MasterCard
cannot override deadlocks relating to agreements
between NewCo and MasterCard that grant MasterCard
rights to NewCo's intellectual property assets.
Distributions to NewCo shareholders are at the
discretion of the holders of two thirds of the
NewCo shares. eServGlobal does not anticipate any
distributions in the short term.
---------------- ---------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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