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Paypoint plc (PAY)

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Tuesday 09 March, 2010

Paypoint plc

Completion of Acquisition






PayPoint completes acquisition of Verrus

PayPoint announces that it has completed the acquisition of Verrus Mobile
Technologies Inc and of Verrus UK Limited (together Verrus) which was announced
on Thursday 4 March 2010.

Verrus  has been acquired  for an initial  consideration of £25  million plus £4
million  deferred consideration and  £4 million consideration  contingent on the
cumulative  results of Verrus until 31 March 2013.  The consideration is payable
in cash and will be settled out of existing resources.

Verrus  is a leading  international provider of  services to parking authorities
allowing consumers to use their mobile phones to pay for their parking by credit
or  debit card.   It operates  under the  Verrus and  PayByPhone brands  and has
contracts  in  the  UK,  France,  Canada  and the USA.  Existing management will
continue to run the business.

David  Newlands,  Chairman  of  PayPoint  plc,  said:  "Verrus  is  an important
acquisition for PayPoint and a key development in our strategy of broadening our
payment   services   capability.   Strong  demand  for  PayByPhone,  interesting
cross-over opportunities with our existing client base for a new payment channel
and opportunities to extend the Verrus application to other services make Verrus
a  powerful addition to PayPoint's payment service offering. We are delighted to
welcome Verrus' employees to PayPoint."

PayPoint will benefit from:

  * Substantial growth in the market for PayByPhone parking;


  * Extension of PayByPhone into other applications; and


  * Synergies from broadening PayPoint's service offering:


  *   * Potential  for international expansion in multi-channel payment services
        off the back of Verrus presence;


  *   * Internet  business offering to parking  authorities for the credit/debit
        settlement from consumers; and


  *   * Enhanced PayByPhone service by offering cash loading of prepaid cards as
        additional payment channel.


The  aggregated  loss  of  Verrus  for  the year ended 31 December 2009 was £0.5
million,  and  its  gross  assets  on  that  date  were  £1.9  million, based on
un-audited  accounts.   PayPoint's  directors  expect  the transaction to have a
positive  impact  on  the  earnings  of  the  group  in  the  second  year after
acquisition at current rates of interest.

Verrus  will continue  to be  managed by  Desmond Griffin  (in Canada) and Robin
Bevan  (in the UK).  Desmond Griffin was  a co-founder of Verrus in 2000 and has
been  CEO since then.   Robin Bevan founded  Verrus UK in  2004 and has been CEO
since  then.  Both have new service contracts on substantially the same terms as
existing  and  both  are  participants  in  the  arrangements  for  deferred and
contingent consideration, payable after 31 March, 2013.

Verrus  is  active,  in  contract  or  in  trial,  in  over 100 towns and cities
including  five London boroughs, Vancouver,  Miami, Washington D.C., Boston, San
Francisco Bay Area and Paris. In addition to dealing with public authorities, it
also  has contracts  or trials  with a  number of  private parking  operators in
Europe  and North America, such as Vinci, Standard, Impark and NCP.  The largest
contract  is with the City of Westminster, where Verrus is the main provider for
on-street  parking  payment.  Since  its  introduction  in  Westminster, parking
revenues  have increased  by 45% and  costs have  reduced by  over 20% driven by
significant  reductions in theft, elimination of  lost revenue from out of order
meters, the ability to introduce more flexible charging and increased yields per
space.

Commenting  on this deal, Alastair  Gilchrist, Strategic Director for Resources,
City  of  Westminster,  said:  "We  have  worked  with  Verrus to bring the very
substantial  benefits of PayByPhone to Westminster,  to provide consumers with a
convenient  service,  with  improvements  to  the  local environment through the
removal  of meters  and improvements  in parking  enforcement.  Verrus  has been
responsive  to requests for  changes to make  the service more user-friendly and
more  efficient.  We  believe the  acquisition by  PayPoint, with  its financial
strength,  reputation for technology development  and service propositions, will
quickly lead to further benefits for the users of our service."


Enquiries
Finsbury+44 207 251 3801
Rollo Head/Don Hunter




Notes to editors

PayByPhone  is usually offered as an  alternative to other payment channels such
as  meters, pay  and display,  pay at  barrier and  attended car  parks. In some
instances (such as in the majority of Westminster), PayByPhone is offered as the
primary  means of  payment.  The  introduction of  PayByPhone has  been shown to
render  substantial  increases  in  revenues  and  reductions in cost to parking
authorities  or operators and  is increasingly being  adopted around the world.
The  annual market for parking revenues in North America and Europe is estimated
at   US$65   billion[1],   offering  a  significant  opportunity  for  increased
penetration.

PayByPhone  is  a  relatively  recent  service  but  experience  to date amongst
customers,  parking authorities and  operators is generally  very favourable and
the  opportunity  to  roll  out  the  service  to  many  cities is substantial.
Extension  of the  service into  other areas  such as  bike rental (currently in
trial),  taxis and ticket  reservations, amongst other  services, offers further
potential.

Verrus' technology allows consumers to link a payment card to their mobile phone
in  a secure environment and then to  make payments using their mobile phones as
the  communication channel with  no need to  disclose payment card details after
first   registering.    Voice,  text,  internet,  smart  phone  and  mobile  web
applications  are all  supported and,  to date,  over two million consumers have
registered.   The system provides the parking authorities with live and historic
data and real-time communication to devices carried by enforcement officers.

About PayPoint plc

PayPoint  is the  leading cash  and internet  payments company  in the  UK, with
operations  also  in  Ireland  and  Romania.   It handles over £9.3 billion from
almost  550 million  transactions  annually  for  more  than  6,000 clients  and
merchants. The company operates several businesses:

  * The PayPoint branded retail network numbers over 22,300 terminals located in
    local  shops (including Co-op, Spar, McColls, Costcutter, Sainsbury's Local,
    One  Stop, Londis and thousands of independents)  in all parts of the UK and
    Ireland.  The terminals process gas  and electricity meter prepayments, cash
    bill  payments, mobile phone top-ups, transport tickets, BBC TV licences and
    a   wide  variety  of  other  payment  types  for  most  leading  utilities,
    telecommunications suppliers and many consumer service companies;
  * An  ATM network which has over  2,300 'LINK' branded machines across the UK,
    typically in convenience stores;
  * PayPoint.net,  an internet payment service  provider, delivers secure online
    credit  and debit card  payments for over  5,200 web merchants, linking into
    all major UK acquiring banks;
  * PayPoint  Romania, a branded national retail network of over 2,400 terminals
    located  in local shops which  process cash bill payments  for all the major
    utilities  and  mobile  top-ups  and  a further 2,600 terminals that process
    mobile top-ups only; and
  * Collect+,  a joint  venture with  Home Delivery  Network Limited, provides a
    parcel collection and drop off service at PayPoint retailers.


PayPoint  floated  on  the  London  Stock  Exchange  in  September  2004 and the
company's  market capitalisation at  3 March 2010 was £257  million. PayPoint is
widely recognised for its leadership in prepayment systems, smart technology and
consumer service.







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