Paystone to Purchase Ackroo for $21 Million in Strategic Acquisition

Ackroo, a Toronto Venture Stock Exchange (TSXV)-listed company specializing in marketing, payment, and point-of-sale (POS) solutions, has entered into an agreement to be acquired by Paystone, a London, Ont.-based company that offers similar services. The all-cash deal will see Paystone acquire all of Ackroo’s outstanding shares at a price of $0.15 CAD per share, with the total value of the transaction reaching approximately $21 million. This acquisition price represents a 25% premium over Ackroo’s closing stock price just before the deal was announced. As part of the acquisition, Paystone will also take on Ackroo’s assets and liabilities, including a $3-million debt owed to the Business Development Bank of Canada.

Ackroo, headquartered in Stoney Creek, Ont., has been publicly traded on the TSX since its debut in 2012, when its stock was initially priced at $2.70 per share. However, over the years, the company’s stock has experienced a significant decline, consistently trading below $0.50 per share since 2014. The last time Ackroo’s stock was valued at the purchase price of $0.15 per share was in November 2021. Despite this long-term decline in stock value, the acquisition by Paystone represents a strategic move to consolidate Ackroo’s business and create new growth opportunities under a larger, private company.

Steve Levely, CEO of Ackroo, who took over the company in May 2014, reflected on the decision to pursue the acquisition. He explained that his primary goal was to increase Ackroo’s value through market consolidation. Levely noted that the company’s current state, alongside the challenges in the capital markets, made this acquisition the best option for the business. By joining forces with Paystone, Ackroo will be able to offer its product, team, and clients the opportunity to benefit from the larger infrastructure and resources of a more expansive private company. Levely emphasized that the acquisition would create a liquidity event for Ackroo’s shareholders, allowing them to realize a return on their investments.

This acquisition is part of a broader trend in the Canadian tech industry, where several companies in the sector have opted to go private in 2024. Notable examples include Montréal-based payments company Nuvei, as well as MDF Commerce, Q4 Inc., and TrueContext. Furthermore, the payments giant Lightspeed Commerce is currently considering a similar move and conducting a strategic review of its business, signaling a shift in how companies are navigating the challenges of public market performance.

The Ackroo-Paystone deal underscores the ongoing trend of consolidation and realignment within Canada’s technology and payments sectors. As companies navigate an evolving business landscape, many are turning to strategic mergers and acquisitions to streamline operations, enhance financial stability, and better position themselves for growth. The integration of Ackroo with Paystone highlights a broader strategy where smaller, struggling firms with valuable assets or client bases are being absorbed by larger companies with more robust resources.

This shift is becoming increasingly common as businesses seek to overcome the challenges of a competitive market, market volatility, and the need for scalability in a rapidly changing economy. By consolidating, companies like Paystone can strengthen their market position, gain access to new technologies, and expand their product offerings, while also ensuring operational efficiencies. In an environment where profitability and innovation are critical, this consolidation trend is likely to continue, driving further M&A activity in the Canadian tech and payments industries.