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Ackroo Inc., a Canadian gift card and loyalty platform, announced early Friday it has reached a “definitive” agreement to be acquired by Paystone, a Canadian-based gift card and loyalty processor, in an all-cash deal for $21 million.
Paystone will acquire all of the issued and outstanding shares of Ackroo at 15 cents per share, as well as assume all of Ackroo’s assets and liabilities. The purchase represents a 25% premium over Thursday’s closing price for Ackroo’s stock and a 36% premium over the 90-days, volume-weighted average price, Ackroo says.
The sale was prompted in part by a need at Ackroo to increase its financial backing to grow the company, it says.
“We will effectively end up 10 times the size of what we are on closing, which is exactly the big jump forward we believe we need,” Ackroo chief executive Steve Levely says by email. “We are also another good example of a small public company not seeing the value of the capital markets currently … so best we go private.”
Levely took the helm at Ackroo in 2014 with the goal of accruing value through market consolidation until the company itself was acquired.
Paystone has been acquiring competitors in the gift card market for several years, including its 2019 acquisition of Datacandy, a provider of gift card and loyalty applications. The assets Paystone has gained through its acquisitions will provide Ackroo with “some great complimentary product offerings to go to market with,” Levely says.
“[Paystone is also] a strong provider in payments, which is an area of growth Ackroo has been unable to really tap into [and] which we believe this deal will unlock for Ackroo and our merchants,” Levely adds.
In related news, The Massachusetts Educational Financing Authority has launched a gift card to help families save for college tuition and pay down student loans.
The cards can be purchased at CVS stores throughout Massachusetts or online at giftofcollege.com in denominations ranging from $25 to $200. The cards can be redeemed towards a 529 college savings plan, which is a tax-deferred college savings plan offered through MEFA and managed by Fidelity Investments.
Cards can also be redeemed through The Massachusetts ABLE program, also known as the Attainable Savings Plan, a tax-advantaged savings program that allows people with disabilities to save money without jeopardizing their benefits.
The cards can also be used to pay down student loans.
The Massachusetts Educational Financing Authority is a non-profit, self-financing state agency that offers fixed-rate loans to undergraduate and graduate students.
Expectant parents purchasing a card will be eligible for a $50 deposit from the BabySteps Program into a U.Fund 529 account within the first year after their child is born. In addition, families saving with the MEFA U.Fund 529 College Investing Plan or the MEFA U.Plan Prepaid Tuition Program may qualify for a 2024 Massachusetts state tax deduction if they purchase a card and redeem in their account by Dec. 31.
A recent survey from Fidelity Investments reveals that 74% of parents say they would welcome a contribution to their child’s college savings account, while 62% say they would prefer a contribution, MEFA says.
