Softgate Systems To Be Acquired By TIO

North American cloud-based payments processor TIO has announced that it will be acquiring Softgate Systems, Inc. — a New Jersey firm that specializes in providing consumers with retail bill payment solutions.

All in, the deal will be worth $31 million divided between $5 million in cash, a $5 million promissory note, a $25 million issuance of TIO shares to the Softgate shareholders and the assumption of approximately $2.5 million in net debt based on balance sheets at signing.

The new acquisition will give TIO an opportunity to boost its national platform and offer a wider range of services to its target customer base: unbanked, underbanked and unhappily banked consumers among the millennial generation.

“We’re very excited to welcome Softgate as well as its valued management, employees, partners and clients to the TIO Family,” said Hamed Shahbazi, CEO of TIO Networks. “TIO and Softgate have been commercial partners for more than eight years, and we have been very impressed with how the company has evolved and built a well-diversified national network of walk-in locations. This is a significant step for TIO and will be a launching point to bring our services to a much larger segment of the United States. TIO and Softgate was always a natural combination based on our cultural alignment and our years of commercial collaboration.”

Softgate was similarly pleased by the announcement.

“We’re excited to join forces with TIO and create a new emerging competitor in the multi-channel bill payment and receivables processing marketplace,” said Rick Auletta, CEO of Softgate. “We look forward to working with the TIO team to meet the growing financial needs of bill issuers across the country. Between our respective competencies, it is clear that both TIO’s and Softgate’s customers will really benefit from the skill and scale enhancements brought about by this unique combination.”

The acquisition is expected to close later this year subject to satisfying applicable regulatory approvals and customary closing conditions.