Cloud-based multi-channel payment processing provider TIO Networks announced that PayPal will acquire TIO for $3.35 CAD per share in cash. That is an approximate $304 million CAD equity value. That price is just a 5 percent premium compared to the day before the announcement.
The acquisition is clearly meant to expand Paypal’s reach in payment services, and scale its audience to a very large public (including people who cannot benefit from regular banking services).
TIO Networks is a small-cap company with a market cap of $280M. It is a company with strong growth. InvestingHaven’s research team tipped TIO Networks several times in the last 12 months, since the company traded at $1.70. Meantime, the stock price of TIO Networks has doubled. This is another spot-on call by InvestingHaven.
Read this article from December 2015: Tio Networks Continues To Attract Buying Interest With A Great Growth Outlook
Read this article from summer 2016: 3 Outperforming Small Cap Technology Companies To Consider In 2016
Read this article from January 2017: 3 Top Tech Stocks For 2017 On The TSX and TSXV In Canada
We remain optimistic about TIO Networks. The company realized for the fiscal year ended July 31, 2016 revenues of $74.7 million CAD and EBITDA of $10.6 million CAD. The growth prospects are still very large. We believe this company is a hold.
Both companies did not announce too many details about the transaction: “Further information regarding the transaction will be contained in the management information circular which is expected to be mailed to TIO shareholders in March in connection with the special meeting of TIO shareholders to be held to consider the transaction.”
This deal has to be re-evaluated once the details about the transaction are known.
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