Paysafe inks deal to sell direct marketing payment processing business to KORT Payments
KORT Payments, an omnichannel payments provider headquartered in Toronto, Canada, has signed an agreement to acquire Paysafe’s direct marketing payment processing business, Paysafe Direct LLC, as part of what it describes as an “aggressive growth strategy”.
Paysafe Direct LLC to be acquired by Canada’s KORT Payments
Paysafe Direct’s business primarily involves processing payments for direct marketing companies and other high-volume, card-not-present transactions, such as subscriptions, online purchases and recurring billing.
Included in the acquisition are the business’s reseller and merchant contracts, team and dedicated technology, with the transaction’s consideration largely consisting of annual earnout payments over the next five years.
The deal is expected to close next month, pending the completion of certain remaining items related to transition services.
In comments, Paysafe CEO Bruce Lowthers explains that the divestiture of the “non-strategic business line” is part of a strategy to achieve “portfolio and resource optimisation to focus on our largest growth opportunities”.
CFO John Crawford describes the sale as “a meaningful step forward to improve our financial performance by eliminating a declining, non-core revenue stream while significantly reducing Paysafe’s exposure to higher risk verticals”.
Earlier this week, Bloomberg UK reported that Paysafe is actively exploring a potential sale of its business amid an 80% decline in its company valuation, which now stands at approximately $1.4 billion.
Citing sources familiar with the matter, the report states that Paysafe is now working with an unnamed financial advisor following takeover interest, but adds that the sale is not guaranteed.
For KORT, which is led by former Paysafe founder and CEO Joel Leonoff, the deal is set to seal the company’s expansion throughout North America.
Leonoff was installed as KORT’s CEO alongside a new management team when the company rebranded from Merrco Payments in July last year.
