This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation and is disclosed in accordance with the Issuer's obligations under Article 17 of the Market Abuse Regulation
(“PayPoint” or the “Company”)
PayPoint announces the acquisition of Handepay and Merchant Rentals
Important step forward in delivering enhanced growth and value in its core
- Handepay is a well-established ‘top 4’ card payments business with over 21,000 merchants processing £3bn annually, with over 30,000 term leasing agreements with SME merchants for card payment terminals achieved through Merchant Rentals
- Enables reach into new SME sectors, including groceries, hospitality, food services and auto trade; very limited customer overlap with PayPoint’s existing card services
- Significant growth in last 5 years with £16.7m gross revenue and adjusted EBITDA of £5.4 million in FY ended
30 April 20201
- Earnings enhancing in first full year of ownership
- Resilient performance through the Covid-19 pandemic, reflecting diverse sector reach and higher levels of card usage, with proactive plan in response to the most recent national restrictions
- Best in class customer proposition, ranked no.1 card service processing provider on Trustpilot with a rating of 4.9/5
- Strong sales and support team, and adds capability to deliver a better proposition, onboarding and in-life customer experience to the combined PayPoint cards business
- Opportunity for synergies – combined share of the
U.K.card merchant market of less than 5%, leading to opportunities within a growing and fragmented market
- Transaction of £70m (Enterprise Value) expected to complete in Q4 of current financial year, subject to regulatory approvals
PayPoint is pleased to announce that it has signed an agreement to acquire Handepay Limited (“Handepay”) and Merchant Rentals Limited (“Merchant Rentals”), leading card payments and card terminal leasing businesses, from a consortium of private investors. The cash consideration for the acquisition is expected to be £70 million on a cash free debt free basis, after closing balance sheet adjustments.
Card payments in the
The acquisition of Handepay will create a combined national card payments business with significant customer diversity: over 30,000 SMEs, spanning the grocery, auto trade, clothing, household goods and hospitality sectors. The business comes with a strong and experienced management team who have successfully built a leading national cards business with broad industry reach. The group’s highly motivated sales and support teams deliver a comprehensive customer proposition with a 4.9/5 Trust Pilot rating.
Leveraging these capabilities, alongside PayPoint’s existing 9,000 customer strong card payment estate, will enhance the end-to-end customer proposition and offering, accelerating the Company’s strategy in the
Adjusted EBITDA in the financial year ended
A systematic approach to the enlarged customer base, and the use of existing customer analytics data for the combined business, creates the opportunity for:
- a better retention strategy for existing merchants
- better targeting of new customers, by region and sector, and
- enhancing the performance and efficiency of the combined sales teams and support infrastructure.
The acquisition is subject to regulatory approvals and, therefore, completion is anticipated to take place in
PwC undertook financial and tax due diligence on behalf of PayPoint plc and Freshfields Bruckhaus Deringer LLP acted as legal adviser to PayPoint plc on the acquisition. PwC acted as lead corporate finance adviser and JMW legal adviser to the shareholders of Handepay and Merchant Rentals for the transaction.
A call and presentation will be held at
PayPoint is due to announce its interim results on
For further information please contact:
PayPoint plc Finsbury
01707 600 300 0207 251 3801
(Email: [email protected])
For tens of thousands of businesses and their customers, we make life and payments more convenient.
For retailers, we offer innovative and time-saving technology that empowers them to achieve higher footfall and increased spend so they can grow their businesses profitably. Our innovative retail services platform, PayPoint One, is now live in over 16,500 shops in the
For clients of all sizes, we also provide market-leading payments technologies without the need for capital investment. Our seamlessly integrated omnichannel solution – MultiPay – is a one-stop shop for digital and other customer payments, via any channel and on any device.
Together, these solutions help millions of consumers to control their household finances, make essential payments and access services like cash withdrawals, eMoney and parcel collections and drop-offs. Our
ABOUT HANDEPAY AND MERCHANT RENTALS
Handepay has been operating in the
1 Aggregated result of Handepay and Merchant Rentals, excludes discontinued operations and payments to shareholders to better reflect ongoing business performance
2 Internal market estimates. https://www.globalbankingandfinance.com/why-are-so-many-smes-across-the-uk-not-accepting-credit-card-payments/
3 Aggregated result of Handepay and Merchant Rentals excludes discontinued operations and payments to shareholders to better reflect ongoing business performance
Quick facts: Paypoint
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