Koenig Capital acted as the exclusive buy-side M&A advisor to Net Element Inc. for PayOnline acquisition deal

28.05.2015

Net Element (NASDAQ: NETE) announced the execution of definitive documentation to acquire PayOnline, a leader in online transaction processing services and payment technology for up to $8.4 million in total consideration.

The closing payment is $3.6 million cash, which has been paid into escrow and $3.6 million in stock. Additional consideration from earn-out incentives up to $1.282 million in cash and stock based on performance.

Net Element is entitled to the full economic benefit from the acquisition of PayOnline from the effective date of the Acquisition Agreement.

PayOnline processes online payments for over 10 million active consumers and thousands of merchants in the Russian Federation, Europe and Asia.

The 2014 McKinsey Global Payments Map released October 2014, states Russia is the world's 6th largest payments market, accounting for $50 billion in payments with a rapidly growing online population. Card issuance is growing at 30% per year.

Net Element plans to integrate PayOnline leading payments platform into its existing global payments-as-a-service network to expand its transaction processing offerings.

Upon the closing of the acquisition, the Company will be able to sell its mobile payment services to PayOnline's merchants who process transactions for 10+ million active Russia, Asia and Europe consumers.

Upon the closing of the acquisition, Net Element global merchants will have access to a broad array of value-added services including card2card transfer, payment split and the highest level of data security (Validated Level 1 PCI DSS Compliance).

Also, because of their direct agreements with European and Russian Federation banks, PayOnline's thousands of merchants will be able to transact in the U.S. while Net Element's U.S. merchants will have an ability to transact in Asia, Europe and Russia.

"PayOnline and Net Element's assets are highly complementary and we can now leverage them to grow revenues by attracting more merchants and consumers to our omni-channel payments platform," comments Oleg Firer, CEO. "Well deserved congratulations to all involved in bringing this transaction to a successful signing."

PayOnline majority shareholder Social Discovery Ventures ("SD Ventures"), who now becomes a Net Element shareholder, and Net Element intend to collaborate on business with SD Ventures' other portfolio companies including Shocase, Shazam and Anastasia Date.

Koenig Capital LLC acted as the exclusive buy-side M&A advisor and Althouse Consulting LLC acted as the exclusive sell-side M&A advisor for this transaction.

About Net Element

Net Element (NASDAQ: NETE) is a global payments-as-a-service, technology provider with an integrated mobile and transactional services platform. Its wholly owned subsidiary, TOT Group operates Aptito providing transaction processing and value-added services utilizing a next generation, cloud-based, point of sale payments platform. We also operate TOT Money, a leading mobile payments service provider that has been ranked in the Top 3 mobile payments providers by Beeline, Russia's second largest telecommunications operator and, upon the closing of this acquisition, PayOnline which is a leading online payment solution in Russia today. Further information is available at www.netelement.com.

About PayOnline

PayOnline provides flexible high-tech payment solutions to companies doing business on the Internet. They have wide experience in integration and customization of payment solutions for websites and mobile apps. They are able to arrange payments on the website of any commercial organization that increases convenience with highest possible level of successful transactions. Thousands of companies in CIS, Europe and Asia use PayOnline to accept payments online.PayOnline offices are located in Russia and in the Republic of Cyprus. For more information, please visit: www.payonline.ru/en

About SD Ventures (Social Discovery Ventures)

Social Discovery Ventures is the international umbrella brand for group of technology and software engineering companies, which provide platforms for social discovery, personal development, and online entertainment. SDV invests into, develops and supports a range of B2C Internet projects and brands under the framework of social discovery. For more information, please visit: www.sdventures.com


© Koenig Capital. 2016