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Paysafe backs $3.9 billion offer from Blackstone/CVC group
August 4, 2017 / 6:55 AM / 4 months ago

Paysafe backs $3.9 billion offer from Blackstone/CVC group

(Reuters) - Payments processing company Paysafe Group (PAYS.L) has backed a 3 billion pound ($3.9 billion) takeover offer from a consortium of funds managed by Blackstone (BX.N) and CVC Capital Partners [CVC.UL], the latest in a string of deals in the sector.

The ticker and trading information for Blackstone Group displayed at the New York Stock Exchange. REUTERS/Brendan McDermid

Paysafe, which offers pre-paid cashcards and online wallets that are popular among online gambling customers, said its board believed the 590 pence per share cash proposal, tabled last month by the consortium, to be “fair and reasonable”.

Paysafe shares closed up 0.3 percent at 598 pence, signalling investors are hopeful for a higher offer.

The offer price represents a nearly 60 percent premium on Paysafe’s shares at the start of 2017. Values of payments firms have surged and mergers and acquisitions have proliferated in the sector as more shoppers have switched from cash to paying for purchases by smartphones or other mobile devices.

U.S. group Vantiv (VNTV.N) is in talks to buy Britain’s Worldpay (WPG.L) for 7.7 billion pounds and France’s Worldline (WLN.PA) said last week it will buy the Baltic subsidiary of First Data Corp (FDC.N). Also in July, private equity firm Permira bought a stake in Sweden’s Klarna.

Blackstone and CVC, which initially approached Paysafe in early May when Paysafe’s shares were worth around 450 pence each, made four separate bids before the fifth offer was agreed, according to two sources aware of the matter, who spoke on the condition of anonymity.

“There is a fundamental change in the way we pay for goods and services, away from the cash and cheques of our parents’ age,” said one of the sources, adding that private equity firms “have a decade-long thesis that this shift will only grow and grow and they want to get in now.”

FINANCING

As part of the deal, Paysafe will divest its Asia Gateway subsidiary to Spectrum Global Limited for up to $308 million payable over six years, according to the bourse statement.

This move will part-fund the purchase by Blackstone and CVC. Debt financing provided by Credit Suisse, Jefferies and Morgan Stanley will also contribute the buyout, along with cash from the Blackstone and CVC funds.

The statement said the deal was expected to close in the fourth quarter of 2017 following approval by shareholders and regulatory authorities in jurisdictions including Britain, Switzerland and the United States.

Lazard was lead advisor to Paysafe, with the firm also supported by RBC Capital Markets and Deutsche Bank. Credit Suisse worked with CVC.

Editing by Mark Potter and David Gregorio

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