Just before insolvency, OTI is sold to Nike for $ 4.5 million – Techtime

by time news

January 20, 2022

The deal will initially include a $ 5.5 million loan to settle the debts of OTI, which filed for liquidation last week. OTI employs about 130 people and develops smart payment solutions for unmanned positions

Nayax, a company that develops clearing and payment solutions for businesses, announced today in a report to the Tel Aviv Stock Exchange that it has entered into a binding memorandum of understanding to purchase an OTI company from Rosh Pina, which develops smart payment solutions for unmanned positions. Nakes will pay $ 4.5 million for the purchase. Nakes estimates the acquisition of OTI will help it penetrate strategic geographic markets where its presence is not high. OTI is mainly active in Russia, Japan and the United States.

The acquisition will be made in two stages, with Nakes offering a $ 5.5 million loan to On Track, which will be used by the company to repay its liabilities, after the company recently updated that it was experiencing cash flow difficulties. The loan that Nakes will grant is for a period of two years, and it will bear an annual interest rate of 10%. In the second phase of the deal, which is expected to be completed within 21 days from the date of signing the loan agreement, OTI (100%) will be merged into Nakes for $ 4.5 million.

OTI, which employs about 130 people and operates in Rosh Pina, provides automated systems for non-cash payment, which are mainly applied at gas stations, food chains, kiosks, vending machines and at the ticketing point of mass transit systems. The systems are based on a zero-range communication protocol (NFC), which makes it possible to electronically identify the payment card and execute the transaction immediately. The systems also provide businesses with detailed real-time telemetry data that allows them to analyze purchasing patterns and manage inventories efficiently.

In the first nine months of 2021, OTI recorded revenue of approximately $ 10.7 million. However, following the Corona plague, the company ran into cash flow difficulties, and last week filed an application with the Nazareth District Court for an order to open proceedings in accordance with the Insolvency and Economic Rehabilitation Law, an application which was now settled with the parties’ memorandum of understanding. In fact, OTI’s business difficulties began as early as the end of 2018, against the backdrop of the trade war between the United States and China. Since it manufactured its systems in China and one of its main target markets is the United States, the high tariffs on goods coming in from China have significantly bitten into its profit margins and it has been forced to export production from China.

Since then, OTI has decided to make a strategic change and build complete payment solutions, including providing services in a Software as a Service format. In this format, the customer pays for licensing and royalties according to the number of transactions he makes in the systems. In the first nine months of 2021, revenue from the SaaS model totaled $ 1.2 million. Last November, Amir Eilam was appointed CEO of the company in place of Yehuda Holtzman, after two years as CEO.

Naikes, established in 2005, has ten global sales offices, more than 500 employees, connections to more than 80 financial institutions, and in addition is a licensed payment institution in Europe and Israel. The company offers complete solutions for cashless payments, management system and customer app.

Posted in categories: News, Mergers & Acquisitions, Cloud, Wireless Communication

Posted in tags: OTI, Nakes

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