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VisionSky Corp. CNQ:VSKY

VisionSky Corp. CNQ:VSKY. May 2006. Tidel White Label ATM’s. Tidel 3400. Tidel is2000. Tidel 3100. Company History. Originally founded as K45 Capital Corporation in April 2002 VisionSky Corporation was created by a RTO transaction to take advantage of the expanding Chinese Banking Market

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VisionSky Corp. CNQ:VSKY

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  1. VisionSky Corp.CNQ:VSKY May 2006

  2. Tidel White Label ATM’s Tidel 3400 Tidel is2000 Tidel 3100

  3. Company History • Originally founded as K45 Capital Corporation in April 2002 • VisionSky Corporation was created by a RTO transaction to take advantage of the expanding Chinese Banking Market • VisionSky North America (VSNA) was a wholly owned subsidiary whose Chinese management team was unable to meet certain milestones. Visionsky disposed of VSNA in June 2005 after milestones were not met. • February 16, 2006 • VisionSky Corporation purchases the ATM assets of 627800 B.C. Ltd., and concurrently does a reorganization of the assets by way of amalgamation creating a tax effective subsidiary in the form of a limited partnership (Transdirect LP) and renames itself to VisionSky Corp.

  4. 627800 BC Ltd. • White Label ATMs • entered business in 2002 o/a Transdirect ATM Sales and Service • non-financial institution owned machines • Transdirect had over 200 sites installed, principally located in • Hotels, C-Stores, Restaurants, Bars, Nightclubs, Bingos, High Schools & Golf Courses • run-rate of approximately 800,000 transactions per year • provides recurring revenue stream from user transaction fees

  5. VisionSky Today • Acquired and operating since February 16, 2006 • Headquartered in Calgary, with ATMs in all 4 western Canadian provinces • Pure ATM play, focused on one business, the white label ATM industry. • Poised to take advantage of “hangover” in the consolidation of the ATM industry and potential “roll-up” play in Canada. • Following U.S. consolidation trend that commenced approximately 18 months ago. • Since February 16, 2006, Transdirect has grown to over 240 sites installed. • Approaching annual run rate of 1 million transactions. • Recurring, stable revenue stream with daily cash flow.

  6. Market Opportunity ATM Products/Services • The ATM has grown consistently since 1996 • Annual organic growth is expected to be between 6% and 8% for at least the next four years. Source: Interac Association: 2006

  7. Market Opportunity ATM Products/Services • Of the 50,000 + terminals in Canada right now approximately 16,000 belong to various financial institutions ie. banks • Of the remaining 35,000 white label ATMs approximately 13,000 are owned by ISO’s (Independent Sales Organizations) with more than 1,000 units • This leaves 21,000 + ATMs where the ISO has less than 1,000 machines. This is the market opportunity for VisionSky to create it’s position in the white label ATM industry.

  8. Market Opportunity - White Label ATMs • Fragmented market structure • White label market estimated to be 35,000 machines in Canada. • Approx. 22,000 of those are operators with less that 750 machines. • Acquisition opportunities • INTERAC recently tightened operational and regulatory requirements for all players • smaller players do not have financial resources or operational infrastructure to become acquirers. • targets primarily small in size. • owner by investors seeking an exit due to lack of scale in their own business. • VisionSky cost advantage • bank business model & higher fixed costs require significantly higher # transactions per month to breakeven. • concentrated non-fragmented regional portfolio. • low cost structure and minimal infrastructure.

  9. Business Strategy • Industry Consolidation • Leverage existing reputation & relationships • VisionSky has identified and started negotiations with 6 companies. If all are integrated the combined company would have over 1,100 ATMs with annual cashflow exceeding $3 million. • Present to existing ISO’s the opportunity to maximize the value of their ATM portfolio by joining a public company • Business segment growth drivers • Organic growth expected to mirror market growth of 6% to 8% in each of the next 3 years • Market share gains through “tuck-in” acquisitions • Stay regional and non-fragmented to maintain low cost structure.

  10. Business Strategy • White-Label ATMs • Transdirect LP has over 240 sites. Intend to grow to 750 sites by year/end and 1000 sites in 18 months. • Daily recurring revenues. • Provide a stable high margin cash flow stream. • Continue to obtain long term contracts • Maintain low cost structure with no significant overhead incurred until approximately 500 sites. • Be selective, disciplined on acquisition opportunities • Business segment growth drivers • Significant acquisition opportunities in regional fragmented market. • Locked up investor acquisitions negotiated. • Grow organically with new sites and dealer network. • Obtain expired competitor contracts. • Acquisition or “roll-up” of portfolio’s of 0-50 sites.

  11. Acquisition Potential • Investor ATMs • The cashflow from the ATMs is split between the site, Transdirect LP and various investors/dealers. • VisionSky has the ability to purchase out select investor/dealers. • $800,000 purchase price negotiated with 50% cash and 50% stock at an effective strike price of $1. • 100% accretive to the bottom line – service costs are already accounted for in cost of services and G&A. • Arms Length ISO purchases • VisionSky has identified additional ISO’s in Western Canada that are interested in selling their portfolios to VisionSky • 100 machines in Saskatchewan • 280 machines in Alberta/Saskatchewan • 160 machines in Northern Alberta • 20 machines in Calgary • 200 machines in BC/AB/SK

  12. ATM Consolidation THE VARIABLE - Access to Capital and Time

  13. Volume and Ownership CNQ Trading Volume Commenced Trading March 1, 2006 Volume March 2006 1,100,000 shares Volume April 2006 483,000 shares

  14. Comparable Valuation

  15. Offering Issuer: VisionSky Corp. Shares Outstanding: 15,965,000 Securities Offered: Convertible Debenture Exchange: CNQ (VSKY) TSX listing planned for 2007 Issue Size: up to C$ 2.5 million Issue Price: C$ Coupon: 12% per annum Conversion: C$1 per $1 debenture Target Closing: June 2006 Agent: Dundee Securities Corp.

  16. Income Statement *assumes completion of 4 investor related acquisitions and one arms length acquisition annualized.

  17. Use of Proceeds • C$2.5MM gross proceeds sought • $1 million note payout on prior acquisition (627800 B.C. Ltd.) due August 1, 2006. • Remainder used to support acquisition strategy • Fund locked up acquisitions from existing investor group. • Fund future acquisitions currently in negotiation. • $500,000 to fund vault cash in ATMS loaded by Transdirect LP • NO capital required for working capital or to fund direct operations.

  18. Compelling Investment • Ground level company, strategically positioned to experience exploit the white label ATM market • Experience Management • Low cost model for operations • Defined discipline • Stable daily recurring cash flow in a recession proof industry • Significant and real opportunities to grow • Acquisition opportunities in White Label ATM market • existing support infrastructure and competitive cost structure • Valuation multiples do not reflect growth potential

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