Card solutions provider EML Payments has agreed to buy Prepaid Financial Services (PFS) for an upfront payment of A$423m (£226m).

The terms of the acquisition also cover an earn-out component worth up to A$103m (£55m). This is based on PFS reaching certain annual EBITDA targets during the three year period after completion of the transaction.

EML plans to fund the deal via an entitlement offer to raise about A$183m and an institutional share placement to raise A$67m.

Founded in 2008, PFS initially focused on reselling pre-paid cards. The company later expanded to offer white label payments and banking-as-a-service technology.

Its portfolio includes consumer, virtual, multi-currency, gift/incentive and instant issue cards.

The company also offers prepaid payments, e-wallets, digital banking capabilities and payout/distribution programmes. PFS provides software for transactional banking and payment services.

The company has operations in 24 countries and supports more than 26 currencies. It caters to blue-chip financial institutions, SMEs, fintechs, public sector, non-financial corporates and NGO bodies.

EML managing director and group chief executive officer Tom Cregan said: “The acquisition of PFS continues to consolidate EML’s market position as one of the largest fintech enablers in digital banking and prepaid globally.

“PFS is highly complementary to EML’s existing solutions suite and adds digital banking and multi-currency offerings to our existing suite, while expanding our global market footprint and ability to cross-sell PFS’s solutions.”

EML expects the acquisition to generate net run-rate synergies of around A$6m.