Vancouver, British Columbia--(Newsfile Corp. - July 16, 2013) - PI Financial Corp. updates coverage on TIO Networks (TSXV: TNC). Following the company's announcement of the acquisition of Globex Financial, analyst Pardeep Sangha reiterated his buy recommendation, increasing his 12-month target from $0.40 to $0.60, a premium of 107% to the $0.29 price the day the report was issued.
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TIO Networks is a cloud-based bill payment processor serving the largest telecom, wireless, cable and utility bill issuers in North America. The company provides bill payment, pre-paid debit card and money transfer services from its multi-channel network of kiosks, point of sale terminals, web and mobile.
The purchase price of Globex is approximately US$8 million, with the company funding the acquisition with cash on hand, $2 million in debt and the issuance of $3 million in equity to Core Innovation Capital, at a price of $0.35 a share.
Globex Financial, and its operating business Global Express Money Orders, is one of the leading walk-up bill payment processors in the United States. Some of the major utility and telecom billers that use Globex include Verizon Wireless, Duke Energy, Florida Power and Sprint. Globex recorded revenue of more than US$10 million in 2012, with gross margins that are significantly higher than TIO's historical gross margins.
Hamel Shahbazi, Chairman and CEO of TIO Networks stated, "The combination of TIO and Global Express will create a formidable market leader in key segments of the under-banked financial services marketplace."
The transaction is expected to close later this year after regulatory approvals and requirements have been satisfied.
Analyst Pardeep Sangha stated, "We like this transaction because it significantly reduces TIO's biller concentration, increases the company's margins and reduces the impact of the declining Cricket Wireless revenues."
The company currently trades at $0.32, well below the $0.60 target price, and with 46.6 million shares outstanding, the company is capitalized at $14.9 million.
For more information about TIO Networks, please visit the company's website www.tionetworks.com or contact Brett Mass of Hayden IR at 646-536-7331 or email brett@HaydenIR.com.
For more information about PI Financial or to obtain a copy of their research report, contact your nearest PI Financial office. Their branches are listed on their website at www.pifinancialcorp.com.
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