The last time Ackroo stock was valued at the purchase price of $0.15 per share was November 2021.
Toronto Venture Stock Exchange (TSXV)-listed Ackroo has agreed to be acquired by London, Ont.-based Paystone, a fellow marketing, payment, and point-of-sale (POS) solutions company.
The all-cash transaction will see Paystone acquire all of the issued and outstanding shares of Ackroo at a price of $0.15 CAD per share, as well as assume all of its assets and liabilities, including a $3-million debt to the Business Development Bank of Canada. The value of the transaction is approximately $21 million and represents a 25 percent premium over Ackroo’s closing price before the transaction was announced.
“Given the current state of the capital markets, it was in the best interest of the company to pursue this transaction.”
Steve Levely
Ackroo
Ackroo, based just outside of Hamilton in Stoney Creek, Ont., has been on the TSX since 2012. Its stock debuted at a price of $2.70 per share but has consistently traded below $0.50 since 2014. The last time Ackroo stock was valued at the purchase price of $0.15 per share was November 2021.
Ackroo CEO Steve Levely said in a statement that, since taking over Ackroo in May 2014, his goal was for Ackroo to accrue value through market consolidation until Ackroo was consolidated itself.
“Speaking on behalf of the board, we believed, at this stage of the business, and given the current state of the capital markets, it was in the best interest of the company to pursue this transaction, which creates a liquidity event for shareholders while positioning Ackroo’s product, team and clients to be able to benefit from a much larger private organization,” Levely said.
A number of Canadian tech companies have opted to go private in 2024, including Montréal-based payments company Nuvei as well as MDF Commerce, Q4 Inc, and TrueContext. Payments giant Lightspeed Commerce is currently entertaining a similar move as it conducts a strategic review of the business.
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According to Ackroo, Levely and “another arm’s-length shareholder” will be deferring payment for their shares by 12 months following transaction close. According to the acquisition agreement, Ackroo can terminate the transaction if Paystone hasn’t acquired a commitment for debt financing that would meet the offer price. If the transaction is terminated under certain circumstances, Paystone is entitled to a fee of $750,000.
The companies expect the transaction to complete in February 2025, at which point Levely will also assume the role chief operating officer at Paystone.
Founded in 2000, Ackroo offers customer loyalty, gift card, and POS services to merchants of all sizes. Its cloud-based marketing platform helps merchants track loyalty, promotions, and gift cards at the point of sale. The company has sustained itself on growth through acquisitions, having acquired 13 companies to date. In 2023, Ackroo acquired two American companies in client engagement startup Simpliconnect for $2 million USD ($2.7 million CAD) and eGift card business GiftFly for $350,000 USD.
Founded in 2009, Paystone has a similar business model, providing payment processing, customer loyalty, and gift card services to merchants while expanding through acquisitions. Paystone purchased Canadian Payment Services, its sixth acquisition, in 2022. The move followed Paystone arming itself with several rounds of funding totalling $99 million in 2021 to fuel both its international expansion and acquisition plans.
Image courtesy Blake Wisz via Unsplash.
