GreenBox Purchases Share of Sky Financial Portfolio for $16M

GreenBox POS, the San Diego-based payments solution provider, has closed on the purchase of a substantial share of Sky Financial & Intelligence for $16 million and 500,000 restricted common shares, the FinTech announced Thursday (April 7.)

The shares were previously loaned to the company by its senior management to maintain compliance with the non-dilution provisions specified in the $100 million note issued to the firm last fall.

One of Sky’s portfolios that has been integrated with GreenBox’s technology for more than a year increased to more than $1 billion in total processing volume. It became a big part of the company’s 2021 growth. Recognizing its continued growth, the company purchased the portfolio, Green Box said.

During fiscal year 2021, a total of $14.5 million of the purchase price had already been recouped by GreenBox from residuals received by Sky.

As a result, the cash spent to acquire Sky’s account portfolios in-house is about $1.5 million in cash. That amount is expected to be recouped in six months or less based on today’s rate produced by Sky’s portfolio residuals to GreenBox.

“By bringing a large merchant account portfolio in-house we eliminate the cost previously incurred from commissions and amplify our margin profile,” said GreenBox Chairman Ben Errez in a statement. “It allows GreenBox to own these customer relationships, securing a considerable portion of our processing volume base with the bonus of being able to offer additional revenue generating solutions.”

In February, Green Box announced it has formed a licensing partnership with Cross River Bank to launch its first banking-as-a-service (BaaS) initiative.

Read also: GreenBox Forms BaaS Partnership With Cross River

The deal allows GreenBox to use Cross River’s infrastructure and access to payment rails to open custodial, reserve and operating accounts for its customers, who can then manage those accounts with tools powered by Cross River.