Those watching the return of tech stocks to the list of top volume traders on the TSX Venture Exchange may have noticed a new entrant recently; Mint Technology Corp. (TSXV:MIT).
Microcap hopeful Mint has undergone a flurry of activity of late that has effectively changed the face of the company. The company today completed the first tranche of a financing it had announced in March. The $3.1 million it closed today is earmarked as slightly more than half of the $6 million it expects to raise.
Earlier this year, Mint began to make moves to acquire complete control of Mint Middle East, a subsidiary it had owned 60% of. Mint acquired full ownership of the subsidiary by convincing shareholders to swap their interest for cash or shares in the TSXV entity.
Much of the proceeds from today’s will be placed in escrow and ultimately used towards the acquisition of a new prepaid card portfolio. In mid-May Mint announced a tentative agreement to acquire the yet to be named company for $5 million.
Mint President and CEO Chris Hogg says the company services about 200,000 cards presently and expects to have 500,000 cardholders on its platform by year’s end.
Based in Toronto, but operating out of Dubai, Mint Technology is a small and regionalized player in a space that is starting to show some real traction worldwide. Wal-Mart recently launched a prepaid payroll card for its employees, and the specific vertical has two successful IPO’s of late.
After going public last year Green Dot (NYSE:GDOT) hit a high of near $65. The stock has since pulled back to the $38 level, where it still commands a market cap of $1.6 billion, on annual revenues of $363 million. And NetSpend Holdings (NASDAQ:NTSP) hit a high near $16 after its IPO last year, before falling back to about half that today. It commands a market cap over $800 million on fiscal 2010 revenues of $275 million.
Mint currently processes payroll for over 200 corporate clients, mainly in the Gulf Region of in the Middle East, but the company is looking to expand into other regions such as Jordan, Saudi Arabia, and Qatar, where the company recently signed a letter of intent with what it calls “a prominent local business group” to establish Mint Qatar WLL.
A report from Boston-based advisory firm Aite Group suggests the wind may be at the back of Mint’s expansion. In 2009, the combined revenues of payroll card programs by Walmart, Green Dot and NetSpend was $44 billion, says the report, but by 2014 that figure is expected to rise to $164 billion
Gwenn Bézard, research director with Aite Group and author of the report, says growth of the space is driven in part because “Many banks still fail to recognize the formidable threat and opportunity represented by prepaid debit cards.”