Sales software developer Hosted Data Transaction Solutions Inc. (TSX:HDX) said Tuesday it has agreed to buy cash machine operator Cash N Go Ltd. for an undisclosed amount, more than doubling its potential annual revenue.
The news sent the Toronto-based company's stock up more than 92 per cent after a trading halt was lifted on Toronto Stock Exchange.
Hosted Data, also known as HDX, said it has signed a letter of intent to acquire Edmonton-based Cash N Go, which operates a operates a network of approximately 1,200 ATMs throughout Canada. Its machines dispense about $1 billion in cash per year and the company reported annual revenue of about $13 million. The combined companies would have about $22 million in annual revenues.
"The ability to provide payment processing alternatives and ATM's to our customers will enhance client relationships where we currently provide point of sale solutions, business control systems, business intelligence tools and closed loop consumer payment systems," HDX president and CEO Paul Howell said in a statement.
"This transaction also provides HDX with technology and revenue that will facilitate further growth through acquisition."
Cash N Go has 26 employees and ATMs throughout Canada at shopping malls, hotels, casinos, entertainment complexes and financial institutions.
The deal is expected to close March 31, subject to HDX shareholder approval, a definitive agreement and regulatory approval.
HDX shares rose 24 cents to 50 cents on the Toronto Stock Exchange with 15,500 traded.