AIB Group and First Data have agreed to jointly acquire a stake of 95.9% in Irish fintech payments company Payzone for €61m in addition to net debt assumption of around €25m.
Image: AIB to form JV with First Data to acquire stake in Payzone. Photo: courtesy of DubhEire/Wikipedia.org.
Through a newly created joint venture (JV), the two companies will be acquiring the stake in Payzone from Carlyle Cardinal Ireland and other existing shareholders for an enterprise value of up to €100m.
The AIB and First Data joint venture will also make deferred payments of up to €11m, which will be based on the achievement of certain conditions. The joint venture plans to acquire the remaining 4.1% stake in Semeral, the holding company of Payzone, in the future, which is currently being held by the company’s management team.
AIB, which is a state-controlled Irish commercial bank, will own 75% in the joint venture, while the remaining 25% will be held by the US financial services firm First Data.
Payzone is a branded provider of specialized payment services in Ireland. The fintech company enables consumer payments by cash, card and card-not-present for daily consumer requirements.
According to AIB, the payments company has a suite of online and mobile payment solutions that cater to more than 300,000 registered consumers in over 7,000 retail outlets across Ireland.
AIB said that the proposed transaction is in line with its strategy to engage in selective investments to evolve its customer service and product proposition in its core market.
The acquisition is expected to deliver significant fintech capability to the Irish commercial bank and further consolidate its digital agenda in a post PSD2/Open Banking economy.
Semeral reported €8.3m of EBITDA before exceptional items and gross assets of €59.0m for the year ended 30 September 2018.
AIB said that the expected return on investment in Payzone comfortably exceeds its cost of capital.
AIB CEO Colin Hunt said: “For AIB, this transaction means acquiring significant fintech capability and Payzone’s substantial payments footprint in Ireland. This will allow AIB to continue to evolve and enhance our customer offering, enable us to pioneer digital ecosystem products and services and represents growth potential.
“We are delighted to partner again with First Data Corporation in setting up this new joint venture and look forward to working with Payzone management to further build on their success.”
Post transaction, Payzone will continue to be headed by CEO, Jim Deignan, and CFO, Nigel Bell, who will stay as shareholders in the company.
AIB said that the completion of its joint venture with First Data and the acquisition will be subject to the meeting of customary conditions including competition clearance.