EML to sell Sentenial for fraction of the €110m paid four years ago

Beleaguered Australian payment group EML Payments is set to close another chapter in its unhappy foray into Irish fintech, agreeing a sale of Kildare-based open-banking business Sentenial at a knock-down price.

EML Payment said it has agreed to sell Sentenial, including its Nuapay services business, to GoCardless Ltd. The headline price of the deal is €32.75m, a fraction of the up to €110m EML paid for the firm almost four years ago to the day.

The final price GoCardless pays may be lower again. EML said the sale includes a potential downward price adjustment linked to ongoing key contract performance, capped at €7.5m, in the period up to completion of the sale.

The exit from Sentenial was well flagged. EML announced back in November that it had received non-binding expressions of interest for Sentential, which had been classified within the wider group as ‘non core’ when the business announced that after a strategic review it would refocus on core business lines that “demonstrate profitability and positive cash flow”.

Sentenial has a strong client base among European banks and its key Nuapay product was recognised at The Card & Payments Awards 2024, an industry event held in London last month.

But it has not been profitable since it was bought by EML, which is projecting an A$2m (€600,000) Ebitda (earnings before interest, taxes, depreciation, and amortisation) loss for the Kildare based unit this year.

The Sentenial business does not have any material product or customer overlap with other EML lines, and is separable from the EML Group wider business, the Australian stock market listed seller said. “The sale also allows the EML Group to simplify its organisational structure and provides additional funds to strengthen the EML Group’s balance sheet.”

The sale at a significant loss comes little more than a month after EML put another of its Irish assets, PFS Card Services

(Ireland) Limited (PCSIL), into liquidation. That orderly and solvent process will not mean any loss to customers but is aimed at drawing a line under an unhappy investment.

PFS Card Services was part of the wider PFS business EML bought in 2021 for an upfront enterprise value of €155m from founders Noel and Valerie Moran, who have now become among the country’s best-known race horse owners.

The PFS investment rapidly turned sour for EML after the Central Bank of Ireland raised concerns around anti-money laundering controls and procedures within the business, leading to limits being placed on the firm’s growth plans and a costly and very lengthy process of engagement with regulators.

The unravelling of the PFS deal has had major knock-on effects on EML itself, tanking its share prices a number of times as news of the regulatory issues in Ireland was announced to the market.

Australian firm had previously put PFS Card Services into liquidation

‘Sentenial has a strong client base among European banks’