Freelancer has entered into a definitive agreement to acquire online escrow service provider Escrow.com for $7.5 million.
The Australian-listed online freelancing marketplace operator told shareholders in a statement (PDF) on Monday that the acquisition of the California-based Escrow.com would help enable it to position itself in the online payments sector.
"This highly complementary acquisition will enhance the ability of our 15 million users to transact securely, and there are large opportunities for growth and synergies with core offerings," said Freelancer CEO and chairman Matt Barrie. "Finally, it is a strong cornerstone for entering the payments space."
Escrow.com acts as third-party platform that collects, holds, and disburses funds according to online buyer and seller instructions. It claims eBay, GoDaddy, AutoTrader.com, and Flippa.com among its partners, and is a strategic partner of the United States' Commercial Service.
The company, which is being bought by Freelancer from an unnamed private investor, was founded in 1999 by Fidelity National Financial, a Fortune 500 company.
According to Freelancer, Escrow.com processed gross payments of $265 million during the 2014 financial year, and claimed net revenue of $5 million, with earnings before interest, tax, depreciation, and amortisation (EBITDA) of $1.2 million.
Escrow.com president and managing director Brandon Abbey said the deal represents a strategic fit for the two companies. Escrow.com's staff will continue to operate the business from its California-based headquarters.
The acquisition of Escrow.com is subject to regulatory approval.
Freelancer said that the purchase of Escrow.com would be funded by a new AU$10 million placement of ordinary shares to institutional investors, which was oversubscribed, and is set to settle by the end of April.
The move to acquire Escrow.com comes a week after Freelancer announced the rollout of its Freelancer Local Jobs offering, which will see it move to tap into a new market well in excess of its existing 15 million users, and likely encroach on the market share of fellow Australian online outsourcing startup Airtasker.
On April 15, Freelancer revealed that it had shifted into a positive cash flow position for the quarter ending March 2015, after reporting a negative net operating cash flow of AU$218,000 in the previous quarter.
The previous financial year saw the company invest millions of dollars in a series of acquisitions aimed at extending its global footprint, user base, and product portfolio.