The combined company expects to process over 200 million transactions representing $75 billion in bill payments over the next year, and will serve 2,200 financial institutions and 1,600 billers.
Based on its first quarter 2006 revenue results, which were up over 25% from the prior year, Princeton eCom has an annual run-rate of approximately $39 million in revenue. Margin on earnings before interest, taxes, depreciation and amortization (EBITDA) was 12%.
Online Resources claims that the acquisition will enable it to leapfrog years of business development.
Matthew Lawlor, chairman and chief executive officer of Online Resources, said, Firstly, by consolidating our consumer service provider (CSP) platforms, we gain significant distribution and economies of scale in serving the financial institution market with our pay anyone service.
Second, we gain a solid business and management team in the biller service provider (BSP) market, enabling us to jump-start our strategic real-time payments initiative. Together, these capabilities make us a major force in web-based payments.
Ronald Averett, Princeton eCom’s chief executive officer, will head the combined companies’ e-commerce business, including Princeton eCom’s BSP and Online Resources’ card, credit and real-time payments services.
The purchase price will be funded from cash on hand and financing provided by Tennenbaum Capital Partners. At the closing of the transaction, Tennenbaum will make a total investment of $160 million in Online Resources. Tennenbaum will hold approximately 14% of shares. The transaction is expected to close by July 15, 2006.
