ScanSource announced a definitive agreement to acquire POS Portal, a leading distributor of payment devices and services primarily to the SMB market segment.
Together, ScanSource and POS Portal will create one of the industry’s largest payments channels. The two companies reportedly sell through complementary solution delivery channels with little customer overlap. ScanSource primarily serves the enterprise and mid-market merchant segments, with thousands of POS value-added resellers (VARs) and system integrators as customers. POS Portal reaches the SMB merchant segment via strong relationships with the leading payment processors, independent sales organizations (ISOs) and many of the leading tablet-based POS software developers. POS Portal’s customers will gain access to ScanSource’s larger portfolio of POS offerings, and ScanSource’s reseller customers will have access to additional services from POS Portal.
For the first full year after closing, POS Portal net sales are estimated to total approximately $110 million with an estimated EBITDA margin in the low teens. Under the agreement, the all-cash transaction includes an initial purchase price of approximately $144.9 million, plus an earn-out payment up to $13.2 million to be made on November 30, 2017. The earn-out payment is based on earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the trailing twelve months (TTM) ending September 30, 2017. The acquisition is expected to be accretive to earnings per share in the first year after acquisition, excluding one-time acquisition costs.
“The acquisition of POS Portal uniquely positions ScanSource as a market leader in both the POS and payments channels,” said Mike Baur, CEO ScanSource, Inc. “POS Portal brings an excellent customer service reputation, highly regarded value-added services, and vast knowledge of the payments industry. Together, we will provide greater business opportunities for our solution delivery channels. The tremendous culture fit between POS Portal and ScanSource will be exciting for our employees and customers.”
“ScanSource has been following our growth and strategy for a few years and saw the opportunity to expand our business model,” said Buzz Stryker, co-founder and CEO, POS Portal. “As the payments channels converge, we and ScanSource are prepared to lead the channel with new services and solutions, and accelerate our strategic plan to provide the shopping and checkout infrastructure to tomorrow’s physical location merchant, in partnership with the channel. We have a common vision for POS Portal to continue to innovate with suppliers, customers, and partners and advance our leading systems and processes.”
Stryker and Scott Agatep, Chief Operating Officer, along with the POS Portal team, will join ScanSource and provide the leadership and direction in further developing the ScanSource payments business. Upon completion of the transaction, POS Portal will become part of the Worldwide Barcode, Networking and Security segment of ScanSource.