Media Central Corporation Inc. (CSE:FLYY) (FRA:3AT) said that it and Varipay Inc. have mutually agreed to not proceed with the Letter of Intent (LOI) as announced at the start of October.
In a statement, the group noted that the LOI contained a number of conditions that MediaCentral and Varipay had agreed to. The company said it was informed that certain conditions would not be met leading to the mutual termination of the proposed transaction.
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The company revealed on October 2 that it had entered into a non-binding letter of intent to acquire Varipay in a strategic move to boost the company’s aggressive e-commerce initiative and bolster sales and marketing synergies across all digital platforms.
Varipay is a digital-payment processing company with established clients in the pharmaceuticals, nutraceuticals, cannabis and CBD, healthcare, and media industries. It offers e-commerce integration, POS retail processing, and virtual terminals to its merchants.
In fiscal 2019, Varipay processed $15.56 million in transactions generating total revenue of $1.65 million and $27,000 in EBITDA (earnings before interest, taxes, depreciation, and amortization). For the six months ended June 30, 2020, it processed $9.50 million in transactions generating revenue of $1.23 million, compared to $5.16 million and $438,000, respectively, in the first half of 2019.
It was expected that the acquisition would have been undertaken by way of a share exchange. Based on the projected 20-day volume-weighted average price of the company’s stock, on closing Media Central had said it expected to issue about 200 million shares to the shareholders of Varipay in exchange for their shares in Varipay.
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