One of the world’s largest payments processors is making a play for B.C.
PayPal Holdings Inc. (NASDAQ:PYPL) is acquiring Vancouver-based TIO Networks in a deal worth $304 million.
The companies announced the definitive sales agreement Tuesday (February 14), which will see PayPal pay $3.35 per share in cash — a 22.6% premium above its 20-trading day average price.
TIO Networks chairman and CEO Hamed Shahbazi told Business In Vancouver he was “very excited” his company was becoming a part of the PayPal family.
“It’s an incredible company,” he said.
“Dan Schulman, the [PayPal] CEO, has a tremendous vision that really aligns well with us and his vision of financial inclusion is one we think gives us an opportunity to really amplify the scale in which our platform operates.”
TIO Networks offers online and mobile solutions for bill payments, processing more than US$7 billion in fiscal 2016.
In 2015, it acquired New Jersey-based Softgate Systems for $31 million. Shahbazi said at the time the deal would create North America’s largest walk-in bill payment network.
Walk-in bill payment networks assist customers lacking access to mobile or online payment options, usually older individuals or new immigrants.
The Softgate acquisition helped expand TIO Network’s footprint in the U.S. from 15 states to 46 states.
But Shahbazi said coming under the umbrella of PayPal means an even wider expansion of the Vancouver company’s services.
“They [PayPal] function in many more countries and with many more customers, so the opportunity to be in a position to serve those customers with bill payment services is one that we found to be just extremely attractive.”
TIO Networks will remain headquartered in Vancouver and Shahbazi told BIV he plans to stick around to lead the company for the foreseeable future.
“It’s just a huge opportunity for everyone here, including me, to work with a world-class Fortune 500 company and become a piece of their platform.”
PayPal’s online money transfer service has 188 million consumers operating in 203 markets across the globe.
It partnered with the BC Tech Association in October 2015 to create a formalized financial technology cluster in Vancouver to help fintech startups innovate and generate revenue.
Alexander Peh, PayPal Canada’s head of mobile, told BIV in October 2016 his company's strategy is geared towards collaborating with as opposed to competing against smaller financial technology companies.
The acquisition is expected to close in the second half of 2017 and has already been approved by the boards of both PayPal and TIO Networks.