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Press release from Marketwire

DirectCash Payments Inc. Announces Execution of Agreement to Acquire Customers Limited, to Create a Leading Global ATM Business

Monday, April 02, 2012

DirectCash Payments Inc. Announces Execution of Agreement to Acquire Customers Limited, to Create a Leading Global ATM Business00:00 EDT Monday, April 02, 2012CALGARY, ALBERTA--(Marketwire - April 1, 2012) - DirectCash Payments Inc. (TSX:DCI) ("DirectCash") is pleased to announce it has entered into an agreement (the "Scheme Implementation Deed" or "SID") with Customers Limited (ASX:CUS) ("Customers") whereby DirectCash has agreed to acquire all of the outstanding shares of Customers for A$1.27 per share in cash. The total consideration for the purchase of 100% of the fully diluted shares of Customers is approximately A$173 million. At signing of SID, Customers will have A$37 million in outstanding debt.The transaction, which has been unanimously approved by the Board of Directors of DirectCash, will create a leading global branded ATM provider with principal operations in Canada and Australia. The Customers Board of Directors unanimously recommends that Customers' shareholders vote in favor of the Scheme, in the absence of a superior proposal and subject to DirectCash obtaining committed funding and an Independent Expert's Report concluding that the Scheme is in the best interests of Customers' shareholders.The acquisition will be implemented through a court-approved Scheme of Arrangement under Australian law (the "Scheme") and is subject to the approval of Customers' shareholders, relevant court approvals and certain closing conditions contained within the SID.The transaction is expected to close early in the third quarter of calendar year 2012 and is expected to be significantly accretive to DirectCash's funds from operations per share in the first fiscal year following the transaction. DirectCash expects to fund the transaction through a combination of debt and equity financing. The Combined Entity:Since inception, Customers has created a strong profitable network of ATMs, with a leading market presence in Australia and a growing ATM business in New Zealand. The Australian ATM market is less saturated than the Canadian market and as a result Customers' ATMs produce higher transaction volumes than the average ATM in Canada. Through this acquisition DirectCash will achieve a leading position in the Australian ATM market, where Direct Cash currently has existing operations in the prep aid cash cardline of business. As a result of the acquisition of Customers, a total of approximately 6,300 ATM sites and related contracts will be acquired by DirectCash in Australia and New Zealand. The acquisition of these ATM contracts will bring the total number of DirectCash ATM active sites/contracts to approximately 14,200. The acquisition of Customers adds approximately C$129 million in revenues and C$39 million in EBITDA, based on the last twelve month period ending December 31, 2011. Following the close of the transaction, Customers will become a new division of DirectCash.In addition, DirectCash will become one of the largest, publicly traded, branded ATM providers in the world with operations in Canada, Australia, New Zealand, Mexico, the United Kingdom and the United States.Management Commentary:Jeffrey Smith, DirectCash's President and Chief Executive Officer said, "We are very excited about this acquisition as it gives us a significant ATM market presence in Australia. Customers is an exceptional ATM operator in Australia with quality contracts in place with its customers. We are excited to have the opportunity to add the Customers business to our operations, and continue to build our presence internationally".Acquisition Highlights:Unique Opportunity to Significantly Grow DirectCash's Core ATM BusinessAdds approximately 6,300 ATM sites, with pro forma total of 14,200 Post the acquisition, DirectCash will have operations in six countries, including, Canada, Australia, New Zealand, Mexico, the United Kingdom and the United States Attractive Financial MetricsSignificant expected accretion to funds from operations per share in the first fiscal year following the transaction High Growth PotentialProvides a platform for growth throughout Asia Pacific, including the existing Customers initiative into New Zealand Opportunity to grow the Customers ATM business platform in Australia and capitalize on the less mature Australian market Transaction DetailsThe transaction is conditional upon Customers' shareholder and Australian Court approval (as is required pursuant to the statutory scheme of arrangement process) and the Independent Expert concluding that the Scheme is in the best interests of Customers shareholders.Completion of the transaction is also conditional on DirectCash securing sufficient funding. Under the terms of the SID, DirectCash has until April 27, 2012 to deliver a binding commitment from a financial institution to provide sufficient funding for DirectCash to perform its obligation with respect of the Scheme (the "Binding Commitment"). Should DirectCash fail to deliver the Binding Commitment by April 27, 2012, or should Customers terminate the SID for a DirectCash material breach, DirectCash will pay Customers a reverse break fee of A$500,000.The SID includes a commitment by Customers not to solicit alternative proposals to this transaction and other exclusivity and confidentiality obligations on Customers. Specifically, the SID includes a requirement to notify DirectCash of competing transactions or approaches by third parties and provides DirectCash with a right to match any superior proposal received by the Customers Board. Customers' exclusivity obligations are qualified by their directors' fiduciary duties.Prior to DirectCash's delivery of the Binding Commitment, if the Customers Board of Directors recommends a superior proposal that is not matched by DirectCash, a break fee of A$500,000 will be payable to DirectCash. After DirectCash has delivered the Binding Commitment, the occurrence of certain events (including any Customers Director recommending a competing transaction or DirectCash terminating the SID for a Customers material breach) will trigger a break fee payable by Customers of A$1.7 million.A full copy of the SID with full details of all conditions precedent and the obligations and restrictions of both parties will be filed in accordance with applicable securities laws and will be found on the DirectCash profile on SEDAR at www.sedar.com. A copy will also be released to the ASX (and will therefore be available at www.asx.com.au).Next Steps and TimetableThe Transaction is conditional upon approval by a simple majority of Customers' shareholders present in person or by proxy at the Scheme meeting (a headcount test) and by at least 75% of the votes cast at that Scheme meeting. The meeting for Customers' shareholders to vote on the Transaction is expected to be held in June 2012.Customers' shareholders should expect to receive a comprehensive Scheme Booklet in May that will contain full details of the proposed Scheme, including the basis for the Customers Board's recommendation that Customers' shareholders approve the proposed Scheme. Customers will shortly appoint an Independent Expert to prepare a report on whether the proposed Scheme is in the best interests of Customers' shareholders. A copy of the Independent Expert's Report will be included in the Scheme Booklet. The Scheme Booklet will be released to ASX (and will therefore be available at www.asx.com.au).Set out below is an indicative timetable for the Scheme.First Court Hearing DateMay 11, 2012Dispatch of Scheme BookletMay 18, 2012Scheme Meeting HeldJune 18, 2012Second Court Hearing DateJune 22, 2012Lodge Court Order with ASIC (Effective Date)June 22, 2012Record DateJune 27, 2012Implementation DateJuly 4, 2012Advisors and CounselBMO Capital Markets acted as sole financial advisor to DirectCash, and Ashurst Australia served as legal advisor. Macquarie Capital (Australia) Limited acted as sole financial advisor to Customers, and Freehills served as legal advisor.Conference Call InformationA conference call hosted by DirectCash will be held on Monday, April 2, 2012, at 10:30am Eastern Standard Time (7:30am Pacific Standard Time) to discuss this transaction.Participants may join the call by using the following telephone dial-in numbers:Toronto: (416) 641-2144 Canada Toll Free: (866) 696-5910 International Toll Free: (800) 8989-6336 The conference passcode to be used is: 8600584#.The transaction presentation is available on the homepage of DirectCash's website. The conference call will be recorded and available for replay on the DirectCash's website (www.directcash.net) shortly after the call.About DirectCashDirectCash is a leading provider of ATMs, debit terminals and prepaid products in Canada. DirectCash also offers ATM services and prepaid cards in the United States, ATM services in Mexico, prepaid cards in Australia, and prepaid cards in the United Kingdom. DirectCash is a full-service operator and transaction processor in each of these business units and has been in the ATM business since 1997 and the debit terminal and prepaid products businesses since 2002.Based upon information obtained from competitors and information publicly available regarding the number of ATMs deployed by each Canadian chartered bank as at October 31, 2011, DirectCash ranks as the largest branded ATM operator in Canada.Additional information about DirectCash, including DirectCash's Annual Information Form and other public filings is available on SEDAR (www.sedar.com) and on the DirectCash's website (www.directcash.net).About CustomersCustomers is listed on the Australian Securities Exchange (ASX:CUS) and operates Australia's largest fleet of ATMs, which are contracted to merchants. The company operates ATMs for Bank of Queensland and Coles Express, whilst also carrying a range of bank brands on selected terminals, including Citibank, Bendigo and Adelaide Bank, and Arab Bank of Australia, as well as its own convenience brands. The Company is also the majority shareholder of New Zealand ATM Services Ltd.Customers prides itself on achieving industry leading network uptime, providing advanced hardware from leading global manufactures and ensuring best practice in service provision. The company is quality certified to ISO 9001: 2008.For further information, please visit www.customersatm.com.au.Forward-looking StatementsThis Press Release contains certain forward-looking statements relating to future events. Forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond DirectCash Group's ability to control, including the impact to DirectCash Group's business, general economic conditions, consumer spending, borrowing trends and regulatory changes to name a few. Certain statements that contain words such as "could", "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. In particular, forward-looking information and statements contained in this Press Release include statements related to DirectCash's accretive acquisitions on a go forward basis and entry into new geographic markets. Readers are cautioned that actual results may vary from the forward-looking information provided.FOR FURTHER INFORMATION PLEASE CONTACT: Jeffrey J. SmithDirectCash Payments Inc.President, CEO & Director(403) 387-2101jeff@directcash.net