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The transaction is for $7.5 million in cash at closing. It has an earn-out potential for ChoicePay shareholders capped at $2 million, based on future business.
"Both companies are optimistic that the deal could close as early as next week. There are still some mechanics and logistics that both companies are working through," said Ben Peters, chief financial officer of ChoicePay, in a phone interview Wednesday.
Peters said he does not know how the acquisition will impact ChoicePay's work force of about 80 members.
ChoicePay, 2448 E. 81st St., is a subsidiary of Tulsa National Bancshares Inc., a federally regulated bank holding company that also is the parent of Tulsa National Bank.
"ChoicePay is a respected industry leader with a solid technology platform and strong relationships with a growing client base, especially in the utilities market," said Ronald L. Rossetti, chairman and CEO of Tier Technologies, in a written statement. "This is a strategic acquisition for Tier as we seek to enhance our electronic payment solutions on a cutting-edge platform."
Rossetti could not be reached to provide further details.
ChoicePay, founded in 1996, streamlines high-volume bill payment processes, according to the company's Web site. Billers can accept customer payments by electronic check, credit card or cash
using its Internet, interactive voice response, call center, kiosk, and agent payment platforms.
Tier Technologies and ChoicePay had been in discussions for about three to four months, Peters said.
The deal's advantage to ChoicePay is that Tier Technologies is a larger company with a greater national presence, Peters said. The public company trades on the Nasdaq stock exchange under the symbol TIER.
"I think it's a testament to the employees of ChoicePay that, in a highly competitive space, our technology and our client base and processes and procedures have been deemed valuable enough by a highly respectable public company," Peters said. "To be acquired and potentially become the platform for the larger entity is a compliment to all the employees who have worked for ChoicePay.
At the end of December, ChoicePay had more than 50 contracts and reported $10.1 million in annual revenue.
Tier Technologies primarily provides federal, state and local government and other public sector clients with electronic payment processing and other transaction processing services.
The company serves more than 3,300 electronic payment processing clients nationwide. Through its subsidiary, Official Payments Corp., Tier delivers payment processing solutions for a wide range of markets.
Laurie Winslow 581-8466 laurie.winslow@tulsaworld.com
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