Blackstone and CVC to buy PaySafe in £2.96bn deal

At current exchange rates, the transaction would value PaySafe's equity at approximately 13x its 2016 EBITDA figure. However, the firm has experienced rapid growth in recent years, with EBITDA increasing by a multiple of 16.7x between 2011 and 2016 and its share price growing by 157% in the last two and a half years.

The company generated revenues of $1bn in 2016, with adjusted EBITDA of $300m. According to unquote" sister publication Debtwire, which cited sources close to the transaction, the deal is based on an EBITDA figure of $350m.

PaySafe had net debt of $280m as of December 2016, implying an enterprise value in the region of £3.17bn.

The deal, which values shares in the company at 590 pence apiece, would see each GP take an equal stake in PaySafe on completion. The price represents a premium of 34% compared to the shares' volume weighted average in H1 2017.

Including shares owned by board members, Blackstone and CVC have received irrevocable commitments and letters of intent amounting to 12.21% of the company's issued shares prior to the general meeting that has been called to vote on the offer.

Some industry insiders believe private equity players are changing their attitudes towards take-private deals, which have been on the decrease since the turn of the century, as was recently reported by unquote". The transaction is the second high-profile acquisition of a payment services company in quick succession, following Permira's acquisition of a stake in Swedish business Klarna Bank in July.

PaySafe is a provider of card payments, digital wallets and online cash systems. Its product range comprises Neteller, Skrill, MeritCard, PaySafeCard, Payolution and Fans Entertainment. The business has operations across 12 global locations and has a headcount of 2,200.

The company recently acquired MCPS in a $470m deal intended to increase its presence in the North American market.

According to a statement issued by the listed business, the acquirers intend to capitalise on the growing consumer trend for digital payments.

Credit Suisse, Jefferies and Morgan Stanley Bank International are providing a debt package to support the transaction. According to Debtwire, the deal will be funded by a $1.9bn-equivalent first lien loan and a $500m-equivalent second lien loan.

Credit Suisse is also acting as financial adviser to the buying consortium on the proposed transaction. Lazard and RBC Capital Markets are acting as financial advisers to PaySafe, while Ashurst is providing legal advice.

The deal is expected to complete in Q4 2017, subject to regulatory approval.

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• Topics
• Buyouts
• UK / Ireland
• Financials
• United Kingdom
• Take Private
• CVC Capital Partners
• Blackstone Group