viewEarthport PLC

Earthport surges on £6.9mln Merrill Lynch deal


AIM-listed Earthport (LON:EPO) has signed a deal with Bank of America Merrill Lynch that will see the banking giant use its cross-border payments services for years to come.

The multi-year agreement will be worth at least US$11.3mln (£6.9mln) in revenue to Earthport, with most of the money coming in within 30 months.

It extends the existing North American deal to the rest of the world.

Earthport has granted warrants to Merrill at a strike price of 24.2p a share over 17.3mln new shares. It may receive additional warrants over 19.3mln more shares at a price of 31p if it pays Earthport well above the minimum US$11.3mln sum.

Chief executive Hank Uberoi said: “Having signed an initial agreement with Bank of America Merrill Lynch in December 2012 for a specific payments service in North America, I am delighted today to announce the progression of this relationship, and the signing of a worldwide contract.

“The new contract with Bank of America Merrill Lynch marks a commitment to a long term strategic relationship, and represents a large and international strategic opportunity across several of Bank of America Merrill Lynch's payments services.”

Broker Charles Stanley says the deal will broaden Earthport’s payment service across the organisation.

“This agreement takes its existing agreement in North America global, and we believe it should drive wider adoption within the bank and accelerates Earthport’s overall evolution,” said analyst peter McNally, who rates the shares a ‘buy’.

The shares jumped 14% to 27.6p each.

Quick facts: Earthport PLC

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Market: AIM
Market Cap: -

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