Moneycorp sponsor Bridgepoint finalises sale prep for exit

Ryan Gould , Charlie Taylor-Kroll , IУБaki Miguel and Dominic Pasteiner
04 August 2023

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Bridgepoint [LON:BPT] is finalising preparations for the sale of UK-based foreign exchange specialist Moneycorp, according to sources familiar with the matter.

Vendor due diligence, carried out by McKinsey & Company, was completed earlier this year with a view to launching a formal auction process as early as the fourth quarter of 2023, the sources said.

The launch is now unlikely to happen before next year, one of the sources said, with several others noting that no decision has been made on the exact timing of the auction process.

Bridgepoint, a London-headquartered buyout fund that is working with Goldman Sachs and Perella Weinberg Partners on the sale, has been reaching out to prospective buyers to gauge potential interest in a buyout, the sources added.

Moneycorp has also been working on renewing its banking licenses and finetuning its business model to appear enticing to prospective buyers before formally launching a sale, one of the sources said.

The UK company, which executed GBP 73.3bn of payments in 2022, is expected to be marketed off an EBITDA of around GBP 80m, the sources said. It could fetch a valuation in the region of 12-13x EBITDA in the event of a sale, according to previous Mergermarket intelligence.

The company generated EBITDA of GBP 70.4m in FY22, up 85% from GBP 38m in 2021, while revenues grew 58% to GBP 220.1m in the same period, according to the company's annual report.

Blackstone, which invested GBP 140m in rival UK foreign exchange group Currencies Direct in March 2022, could be a logical bidder for Moneycorp, according to an additional source. UK digital payments provider Wise would also be among the logical strategic acquirers, despite not having been particularly acquisitive historically, the same source added.

US-based Fleetcor has also previously been tipped as a logical strategic buyer, as reported.

Since initial deliberations over a sale last year, Moneycorp has undergone management changes with the appointment last month of Velizar Tarashev as CEO. Tarashev, previously the company's CFO, succeeded Mark Horgan who stepped down after 12 years in the top-management role.

At the time of publication, Moneycorp has a Likely to Exit (LTE) score of 61, according to Mergermarket's predictive algorithm*, largely driven by the asset having been held for longer than the median period for similar funds. Bridgepoint acquired the company from SOF Investments in 2014 at a price of GBP 212m.

Founded in 1979, Moneycorp provides payments products and forex services globally. It has 11,000 active corporate clients across 190 countries.

The EMEA payments space has been active recently in terms of deals. In June, Brookfield agreed to acquire UAE-based Network International at GBP 4 per share, valuing the target at GBP 2.2bn. And on July 6, the shares of London-based B2B cross-border payments company CAB Payments fell 9.6% to GBP 3.03 on its first day of trading after pricing its initial public offering at GBP 3.35 per share. Yesterday (2 August), the shares closed at GBP 2.995.

Representatives for Bridgepoint, Goldman Sachs and Moneycorp declined to comment. Perella Weinberg and Mckinsey did not respond to requests for comment.

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.