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Stonegate Capital Partners Initiates Coverage on Payment Data Systems, Inc. (NASDAQ: PYDS)

DALLAS, TX / ACCESSWIRE / August 30, 2017 / Stonegate Capital Partners initiates coverage on Payment Data Systems, Inc. (PYDS):

COMPANY DESCRIPTION

Payment Data Systems, Inc. (PYDS), together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The Company offers various types of automated clearing house (ACH) processing, and credit, prepaid card, and debit card-based processing services. The Company also offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services, accessed through a physical terminal. Furthermore, the Company creates, manages, and processes prepaid card programs for corporate clients to issue prepaid cards to their customer base or employees and also issues general purpose, reloadable cards to consumers as an alternative to a traditional bank account. Payment Data Systems, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

SUMMARY

Payment Data Systems is using the cash flow from its core ACH, credit card and debit card processing business to invest in new business opportunities. With a solid balance sheet and positive cash flow, the Company is investing for the long-term, and hopes to continue its growth by:

  • Operating in niche verticals where it can be a leader in ACH and credit card payment processing
  • Focusing on delivering a better customer experience compared to larger competitors by offering its customers leading technology platforms and customization. As an example, Payment Data Systems states that it was the first prepaid card integrated with Apple Pay
  • Enabling organic growth through continued use of its indirect sales model to drive revenue growth
  • Using its cash flow to fund growth initiatives such as continuously innovating its merchant processing platform
  • Expanding its ACH banking relationships
  • Increasing the brand awareness of its Akimbo platform
  • Supplementing its organic growth by targeting acquisitions of credit card processing portfolios that can provide immediate cash flow
  • Acquiring companies that have complementary products and services such as the March 2017 announced acquisition of Singular Payments; Singular Payments processed $440M in payments and processed 2.5M transactions in 2016. Should the acquisition close, Payment Data Systems should increase its processed payments by about 15% and its processed transactions by about 20%
  • Continuing to rely on its balance sheet that shows no debt and has a clean capital structure

We employ a comparison analysis using a Price/Sales framework. The details are on page 5. We have not modeled the pending acquisition of Singular Payments and as such, should the acquisition close, this event would represent upside to our forecast. We note that the Company issued a press release 8/28/17 stating that the transaction is set to close 9/1/17, giving us additional confidence that the acquisition will likely come to fruition in the near-term.

The full report can be accessed by clicking on the following link:

http://stonegateinc.com/reports/PYDS_Initiation_AUG_2017.pdf

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high quality investment opportunities.

SOURCE: Stonegate Capital Partners