Palamon, Corsair in £165m dividend recap for Currencies Direct

The recap was provided by incumbent lenders CVC Credit and Alcentra, which backed Palamon and Corsair's acquisition of the foreign exchange service in 2015. The refinancing includes a 5.5x senior portability feature.

The recap enabled a "substantial return of capital for shareholders", the GPs said in a statement.

Unquote sister publication Mergermarket reported in December 2020 that the GPs had mandated William Blair to explore strategic options that could lead to a sale of Currencies Direct.

Corsair and Palamon acquired the UK foreign exchange and payment service in 2015 for more than £200m, investing alongside the management team. Palamon invested via Palamon European Equity III, launched that same year, according to Unquote Data. The fund went on to close on €402m in June 2017, with roughly 50% of the fund deployed at that point.

The GPs said in a statement that, since their acquisition, the company increased its revenues from £40m in 2015 to £85m in 2020, and nearly tripled EBITDA from £13m to £33m over the same period. At the same time, net leverage reduced from more than 5.5x at the time of acquisition to 1.1x at the time of the dividend recapitalisation.

Company
Founded in 1996 and based in London, Currencies Direct is a foreign exchange service. It generated turnover of £85m in 2020 and EBITDA of £33m.

People
Palamon Capital Partners – Ali Rahmatollah (partner).
Corsair – Derrick Estes, Raja Hadji-Touma (partners).
Currencies Direct – Keith Hatton (CEO).
Alcentra – Kris Winter (executive director).
CVC Credit – Chris Fowler (managing director).

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• Topics
• Refinancing
• UK / Ireland
• Financials
• Exits
• Palamon Capital Partners
• United Kingdom
• Fintech
• Recapitalisation