Paysafe to Acquire Merchants’ Choice, Considering $3.7 Billion Buyout Bid
It’s hard to say which is more compelling. On July 21, Paysafe Group plc announced plans to acquire Merchants’ Choice Payment Solutions (MCPS) for $470 million while also considering its own buyout bid from Blackstone and CVC Capital Partners, which the Telegraph reports is worth £2.9 billion (US$3.7 billion).
Paysafe, a global provider of payment solutions, which already increased its business significantly with the acquisition of Skrill in 2015, has agreed to acquire substantially all the assets of Delta Card Services Inc., the holding company for MCPS, a payment processor based in the Houston suburb of Shenandoah, Texas.
MCPS offers card processing services to approximately 60,000 merchants in 50 states and processes more than $14 billion in sales volume annually, according to the announcement.
The acquisition of MCPS expands Paysafe’s processing scale and product set for ISOs and merchants in North America. The addition of point-of-sale activities to Paysafe’s processing division significantly strengthens its ability to provide processing for POS, online and order-ahead payments all under a single real-time consolidated analytics platform, the company said.
The consideration of $470 million, which is payable in cash, will be funded by a $380 million incremental loan facility drawn under the existing senior facility agreement, underwritten by BMO Capital Markets, Deutsche Bank and other syndicate banks, plus $90 million from existing cash funds.
The combination with MCPS, which will close in the third quarter of 2017 pending approval, is expected to result in annual cost synergies of approximately $7.5 million, according to the company.
MCPS CEO Todd Linden will remain with the company as part of Paysafe’s North America processing operations.
Separately, Paysafe announced it’s considering an all-cash offer for the entire issued and to-be-issued share capital of the group by a consortium consisting of funds managed by Blackstone and funds managed by CVC Capital Partners. The stock price soared to a record high 590.50 on Friday and closed today (July 24) at 583.50.
The possible buyout comes amid considerable consolidation in the payments industry, including Vantiv’s $10 billion bid for U.K.-based Worldpay.