The Board of payments services company Paysafe Group Plc (LON:PAYS) confirmed today that it has received a preliminary, conditional proposal from funds managed by Blackstone (NYSE:BX) and funds managed by CVC Capital Partners (such funds together, the Consortium) regarding a possible all cash offer for the entire issued and to be issued share capital of the Company by a newly incorporated company jointly owned by funds advised by the Consortium members or their respective affiliates (Bidco) (the Possible Offer).
The Paysafe Board was initially approached by the Consortium in early May 2017. Following the receipt of a number of indicative proposals from the Consortium that were rejected, due diligence access was granted on the basis of a possible offer of 590 pence per share.
Under the terms of the Possible Offer, the ordinary shareholders of Paysafe would receive 590 pence in cash per ordinary share in Paysafe. The terms of the Possible Offer represent a premium of approximately 34% to the volume weighted average price for the six month period ended 30 June 2017, the day prior to broad sector consolidation speculation.
Paysafe’s largest shareholder, Old Mutual Global Investors (UK) Limited, has sent Paysafe a non-binding letter of support for (and intent to vote in favour of, or accept) the Possible Offer, in respect of 50,000,000 of the Company’s ordinary shares (being approximately 10.3% of its current issued share capital).
The Consortium has indicated that its financing requirements will be funded in part with the proceeds of a disposal of any business the Consortium considers to be non-core, such as the Asia Gateway business. Entry into an agreement by the Consortium to sell the Asia Gateway business to a third party buyer is a non-waivable pre-condition (Pre-Condition) which must be satisfied before the making of any firm offer by the Consortium. The key terms have already been agreed with a third party buyer.
There can be no certainty that an offer will be made, even if the Pre-Condition is satisfied. A further announcement will be made in due course, as appropriate. Completion of any firm offer, if made, will be subject to Paysafe shareholder approval and receipt, on satisfactory terms, of regulatory and merger control approvals, as well as other customary conditions.
Paysafe also announced today that it has agreed to acquire substantially all the assets of Delta Card Services Inc., the holding company for Merchants’ Choice Payment Solutions (MCPS), a payment processor based in the Houston suburb of Shenandoah, Texas. MCPS is a data-focused full service payment processor for merchants and sophisticated, high-volume Independent Sales Organisations (ISOs) in North America. Delivering card processing services to approximately 60,000 merchants in 50 states and processing over $14 billion in sales volume annually, MCPS is a leading provider to small and medium-sized businesses.
The acquisition of MCPS expands Paysafe’s processing scale and product-set for ISOs and merchants in North America. The addition of point-of-sale (POS) activities to Paysafe’s Processing division significantly strengthens its ability to provide processing for POS, online and order ahead payments all under a single real-time consolidated analytics platform.
The consideration of $470 million, which is payable in cash, will be funded by a $380 million Incremental Loan Facility drawn under the existing Senior Facility Agreement, underwritten by BMO Capital Markets, Deutsche Bank and other syndicate banks, plus $90 million from existing cash funds.