SOURCE: DirectCash Payments Inc.

DirectCash Payments Inc.

September 30, 2015 17:00 ET

Correction From Source: DirectCash Payments Inc. Announces Renewal of Service and Marketing Agreements With DirectCash Bank and Extension of Agreement to Acquire Directcash Bank

CALGARY, AB--(Marketwired - September 30, 2015) - A correction from source has been issued for the press release titled DirectCash Payments Inc. Announces Renewal of Service and Marketing Agreements with DirectCash Bank and Extension of Agreement to Acquire DirectCash Bank disseminated today at 8:39 A.M. ET. There were changes made to the text in the second paragraph. The complete and corrected release follows:

DirectCash Payments Inc. ("DCPayments" or the "Company") (TSX: DCI) today announced that it has executed a long-term renewal of the Company's service and marketing agreements with DirectCash Bank (the "Bank"), as well as extended its agreement (the "Agreement") to acquire the Bank, a Schedule I Canadian charted bank, to August 15, 2016.

The Bank will be acquired through the acquisition of all of the issued and outstanding shares of the Bank's sole shareholder, 6676405 Canada Ltd. ("6676405"), for consideration of $15 million, payable in the form of common shares of the Company ("Common Shares") issued from treasury at a price of $12.99 per share, which is equal to the 20 day volume-weighted average trading price of the Common Shares on the Toronto Stock Exchange as at the close of business September 29, 2015 (the "Transaction"). Accordingly, upon closing, the Company will issue 1,154,734 Common Shares to the shareholders of 6676405, subject to adjustment on account of a minimum net asset value of the Bank as at closing in accordance with the terms of the Agreement. From May 13, 2014, when DCPayments first announced the Agreement, the Bank's Net Income has increased by 38% to $0.6 million and 73% to $1.2 million respectively for the three and six months ended June 30, 2015 as compared to the prior year periods. Closing of the Transaction is subject to a number of regulatory, governmental and other approvals and consents, including the approval of the Minister of Finance (Canada) and the Toronto Stock Exchange.

Management's Commentary

"We are pleased to renew our agreements for service and marketing, as well as extend our agreement to acquire the Bank. The Bank is integral to our ongoing operations and provides a competitive advantage to DCPayments in our Canadian business," said Jeffrey Smith, DCPayments' President and Chief Executive Officer.

Forward Looking Information:

Certain statements contained in this news release constitute forward-looking statements or information (collectively, "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements concerning the proposed acquisition by the Company of the Bank through the acquisition of all of the issued and outstanding shares of 6676405, including the impact of the Transaction on the Company and timing for closing of the Transaction.

With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things, the timing of receipt of regulatory approvals for the Transaction (including Toronto Stock Exchange approval and approvals under the Bank Act (Canada)), the ability of the Company to complete the Transaction and the ability of the Company to execute and realize on the anticipated benefits of the Transaction.

Although the Company believes that the expectations reflected in the forward looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These risks and uncertainties include, among other things, the failure of the Company to receive required approvals to the Transaction in a timely manner, or at all, delays in completing the Transaction and the risk that the Company may not complete the transaction and the other factors described under "Risk Factors" in the Company's most recently filed Annual Information Form available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release speak only as of the date of this news release. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

About DirectCash Bank

The Bank is a Schedule 1 Canadian chartered bank and is a principal member of Visa, Mastercard and Interac. The acquisition of the Bank will enhance the marketing flexibility of the Company and better enable the Company to take advantage of opportunities which arise in the industry. As the payment industry evolves, having 100% ownership of a Schedule 1 chartered bank in Canada will provide the Company with a unique and not easily replicable competitive advantage for the long term that compliments the Company's pre-paid card business, as well as the credit union and financial institution processing and outsourcing business. The Bank does not engage and has never engaged in any lending activities. The acquisition of the Bank is strategic for the reasons indicated and in light of the existing contractual arrangements between the Company and the Bank.

About DCPayments

The Company is the largest branded ATM provider in Canada and Australia, and the third largest branded ATM provider in the United Kingdom. DC Payments is one of the leading providers of credit union and other financial institution processing and outsourcing services, branded non-financial institution debit terminals and prepaid card products in Canada. DC Payments also offers ATM services in Mexico and New Zealand.

Additional information about DCPayments is available on SEDAR (www.sedar.com) or DCPayments' website at www.directcash.net.

Contact Information

  • For further information please contact:

    Amanda J. Gallacher
    Vice President, Corporate Strategy & Acquisitions
    Direct Telephone: (403) 387-2158
    Fax: (403) 451-3058
    e-mail: investorrelations@directcash.net

    or

    Jeffrey J. Smith
    President & Chief Executive Officer
    Direct Telephone: (403) 387-2101
    Fax: (403) 451-3001
    e-mail: jeff@directcash.net