Paysafe soars after £3bn bid
PAYSAFE has emerged as a £2.9billion takeover target for private equity as a growing shift from consumers using cash to using mobile devices to pay for goods and services triggers a flurry of financial technology deals.
Shares in the FTSE 250 company climbed 37p to 579p as it received a 590p-a-share approach from Blackstone and CVC Capital Partners.
The consortium would part-fund the cash deal with disposals of Paysafe’s non-core businesses, with the sale of one of these – Asia Gateway – a pre-condition to a takeover. A buyer has already been lined up.
The approach came on the same day that Paysafe, whose services include pre-paid cashcards and online wallets, agreed to buy Texas-based payment processor, Merchants’ Choice Payment Solutions, for $470million.
Paysafe, led by chief executive Joel Leonoff, pictured, said it was initially approached by the consortium in early May. It opened its books when the price reached 590p-a-share after rejecting “a number” of proposals.
It added: “There can be no certainty that an offer will be made, even if the pre-condition is satisfied.”
The consortium has until August 18 to make a firm offer. Paysafe, which changed its name from Optimal Payments in 2015, posted a $194.4million operating profit last year as its annual revenue broke through the $1billion barrier for the first time, prompting Leonoff to declare: “We have big ambitions in a sector that is rapidly accelerating.”
CVC used to own Skrill, a payments firm bought by Optimal Payments.
The consortium’s move for Paysafe comes a fortnight after the UK’s biggest payments processing firm, Worldpay, agreed to be bought by US rival Vantiv for £7.7billion.
French payments group Ingenico is buying Swedish firm Bambora for €1.5billion, while France’s Worldline has agreed to buy Sweden’s Digital River World Payments.
Angus Grierson, of corporate finance and investment firm LGB & Co, said: “Private equity firms like Blackstone and CVC Partners recognise that businesses like Paysafe have a stronger value than conventional payment cards.
“They give users a clear overview and control of spending with the convenience and security of a single pin or password.
“Once customers have been won, additional features and services can be integrated.”