PayPal poised to buy Vancouver's TIO Networks for $304 million
TIO Networks chairman and CEO Hamed Shahbazi (left) and John Kunze, vice-president of PayPal Holdings' Xoom service, following the Feb. 14, 2017 announcement that PayPal plans to acquire TIO for $304 million. (TIO Networks/Handout Photo)
PayPal is ramping up its efforts to compete with the world's big banks with a $304-million offer to take over Vancouver-based TIO Networks.
It's a "strategic acquisition" for what is arguably the Internet's original financial-technology firm, said John Kunze, vice-president of PayPal subsidiary Xoom.
TIO has spent the last 20 years building an online, multi-option network to clear and manage bill payments outside of banking networks for millions of consumers.
"The products and services that (CEO Hamed Shahbazi) and his team have worked so hard to get out into the hands of customers go right to the strategic vision of PayPal, which is to democratize financial services," Kunze said.
TIO says it handles direct bill-payment transactions between some 14 million consumers and 10,000 billers, such as utility companies and mobile-phone providers. Customers can make payments online, on cellphones, self-serve kiosks (the company has more than 900 of them) or at one of 65,000 over-the-counter locations.
"It's really exciting," Shahbazi said of the proposed merger, because PayPal zeroed in on TIO as a target to build a bigger bridgehead in Canada.
Shahbazi added that TIO's objectives, in serving clients outside of the channels of financial institutions, align nicely with PayPal's mission for "financial inclusion."
Kunze said there are millions of consumers in the U.S. "and a couple billion worldwide" who are either not served or underserved by financial institutions and PayPal plans to build on what TIO is doing in Vancouver to market to those populations.
TIO employs about 180 people, most of them in Vancouver, Shahbazi said.
"We certainly would expect to see expansion (in Vancouver)," Kunze said.
The deal, which will see PayPal pay TIO shareholders $3.35 per share for their holdings in the Vancouver company, is due to close in the second half of 2017, pending the approval of TIO stockholders in a vote to be conducted at a special meeting in April.