UK’s PayPoint to make double acquisition worth £70m
PayPoint, a UK firm which processes in-store bill payments, has announced its plan to execute a double acquisition worth £70 million.
One of the soon-to-be-acquired entities is Merseyside-based card payments business, Handepay, which processes £3 billion annually.
The other is Merchant Rentals, a provider of payment terminal finance, which shares the same address as Handepay.
Logic behind the acquisitions
The aim of the deal is to create a national card payments business with a network of more than 30,000 SMEs. Hence, boosting PayPoint’s presence in the SME sector.
It wants to expand into groceries, auto-trade, clothing, household goods and hospitality sectors.
PayPoint currently boasts a 9,000-customer strong card payment estate. The firm recently announced the sale of its Romanian arm to Innova Capital. It wants to accelerate its growth in the UK card market with these acquisitions.
In order to buy these firms off a consortium of private investors, PayPoint has extended its current financing facility from £75 million to £95 million.
Nick Wiles, PayPoint’s CEO, says Handepay has “delivered a resilient performance through COVID-19”.
The acquirer praises Handepay customer base “breadth”. As well as its “strong recovery of active merchants after the first lockdown”, and its “proactive plan in response to the most recent national restrictions”.
How the acquisition will work
Handepay’s chief commercial officer, Mark Latham, will join PayPoint’s executive board as its card services director. Latham will therefore head up the combined cards portfolio.
Ian Kennedy, Handepay’s sales director, will lead sales for both PayPoint and Handepay. Kennedy will report into Ben Ford, PayPoint’s retail services director.
Andy Peake, Handepay’s CEO, will remain in post until the acquisitions’ completion. After which, he will act as a consultant to PayPoint.
“The whole team are excited to be joining the PayPoint Group and benefiting from the scale, expertise and market leadership that they have built in omni-channel payments and technology over the last 24 years,” says Peake.
PwC acted as lead corporate finance adviser on the deals.