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08/07/2007

Bartercard International Sells Australian Arm For $25.5 Million

London-based Bartercard International has completed its privatization and also sold, on August 2, Gold Coast-based Bartercard Australia for A$25.5 million. The board of Bartercard is also proposing to pay at least A$10 million in special dividends to shareholders. (Payment is likely to take place within the next 60 days.)

Funding for the A$25.5 million purchase was provided by the National Australia Bank, along with Bartercard International�s vendor financing of A$6 million for the balance. Bartercard Australia will continue to be a licensee of Bartercard International and will pay annual licensing fees of A$2.5 million.

The Australian arm [Bartercard Australia] has 23,000 members, and was acquired in a management buyout led by Brian Hall (a company founder), Murray D�Almeida (Executive Director of Sales), and Trevor Dietz (Managing Director of Bartercard Australia).

Hall, D�Almeida, and Dietz will have 75% ownership of Bartercard Australia, with the balance held by a private equity company�CAT Capital. Bartercard International will retain a 0.5% stake.

According to Wayne Sharpe the moves represent a major step forward for Bartercard, both in Australia and internationally.

�Businesses can do better when management has ownership and this was the reasoning behind the management buy-out (MBO). Evidence of this was the MBO of Bartercard New Zealand from Bartercard International five years ago. They have achieved impressive growth,� Sharpe asserted.

Sharpe says the company will also sell its UK operation as part of a new strategy to focus on being an international licensor, rather than a licensee. Selling the Australia and UK licenses will allow Bartercard International to expand its European network and push into the USA.

Founded in the Gold Coast in 1991 by Wayne Sharpe, Andrew Federowsky and Brian Hall, the company now has 58 offices in Australia. Bartercard International was formed in 1996 and has grown to become the world�s largest trade exchange...with operations in twelve (12) countries including the UK, Asia, and the Middle East. Planned expansion in the future will include India and South Africa.

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