Paysafe announces acquisition and possible GBP2.8bn takeover offer

After rejecting initial proposals lodged by Blackstone and CVC since early May, Paysafe has now granted the consortium due diligence access on the basis of a possible 590p-a-share cash offer, which values the company at £2.8bn.

The terms of the possible offer represent a premium of approximately 34% to the average price for the six month period ended 30 June, which Paysafe said is the day prior to some broad sector consolidation speculation in the media and has seen its shares climb to to just below 540p at the close on Thursday and approaches for rival Worldpay.

So far, Paysafe has received a letter of support for the offer from 10.3% shareholder Old Mutual.

Meanwhile, the FTSE 250 company has also been working on the deal to buy Texas-based payment processor Merchants' Choice Payment Solutions (MCPS), which it now says is expected to complete in the third quarter of 2017.

The addition of MCPS, which delivers card payment processing services to roughly 60,000 merchants and high-volume independent sales organisations in North America, adds point-of-sale activities to Paysafe's processing division that "significantly strengthens its ability to provide processing for POS, online and order ahead payments all under a single real-time consolidated analytics platform" and will reduce Paysafe's revenue exposure to online gambling from approximately 46% to 35%, and revenue from the Asia Gateway business from approximately 13% to 10%.

The $470m cash consideration will be funded by a $380m incremental loan facility drawn under the existing bank agreement, plus $90 million from existing cash funds.

MCPS reported revenue of $446m and earnings before tax of $18.4m in the year ended 31 December 2016.