Partnerships / Acquisitions

Amid CVC/Blackstone Paysafe Bid, Paysafe Makes Its Own Acquisitive Moves

One bid, two bids — or, in this case, the biddee is also a bidder.

As reported Friday (July 21), American multinational financial services firm Blackstone and private equity firm CVC Capital Partners have bid to acquire payments processor Paysafe Group. And, in other news, Paysafe is making its own play for payment services provider Merchants’ Choice Payments Solutions (MCPS).

The price tags attached to the deals were reported as $3.7 billion and $470 million, respectively.

In the case of the consortium-for-Paysafe deal, the 590 pence per share offer stood 9 percent above Thursday’s closing price for the company, before the bid was announced. The Blackstone/CVC consortium of funds first approached Paysafe in early May, according to published reports and a company statement.

The due diligence, the Paysafe said, came after several offers, ultimately arriving at the 590 pence per share bid. The company also said its largest shareholder, Old Mutual Global Investors at 10.3 pence per stake, has stated support for the deal.

In the meantime, the Blackstone/CVC consortium has said it would fund the deal at least in part with proceeds from asset sales, including that of Paysafe’s Asia Gateway business. Such transactions have been reported to be preconditions of the deal.

In terms of timing, Blackstone and CVC Capital Partners must make a formal bid by August 18.

The $3.7 billion bid takes its place behind the roughly $10 billion bid seen when Vantiv moved to acquire Worldpay. The trend in which strategic intent spurs financial firms to bridge the gap between cash-based and digital payments seems to be a growing one.

Separately, Paysafe said it entered into an agreement to purchase Merchants’ Choice Payment Solutions for $470 million. The Texas-based, merchants-focused payment processor boasts an installed base of 60,000 across the U.S. and a total annual sales volume of $14 billion.

The $470 million price tag will be funded by $90 million in cash and a $380 million loan. MCPS reported $446 million in 2016 sales, with a pre-tax profit of $18.4 million.

Perhaps presaging the MCPS deal, Paysafe Group’s CEO, Joel Leonoff, discussed the status of his company with PYMNTS’ Karen Webster in May.

“We’ve assembled an interesting ensemble of products,” Leonoff said. “As the market is developing, we’ve been driving forward and consolidating all of our offerings into one platform to stay one step ahead…Payments has been static for a very long time, but that’s changed drastically in the past two to three years. For one, the lines between online and brick-and-mortar are starting to get very blurry.”



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