UK-based Prepaid Financial Services offers payments and digital banking services across 24 countries, supporting more than 26 currencies
Image: EML Payments to acquire UK-based payments company. Photo: Courtesy of Steve Buissinne/Pixabay.
Australian payment services provider EML Payments has agreed to acquire London-based Prepaid Financial Services (PFS) for £226m ($289m).
Founded in 2008, Prepaid Financial Services is primarily a reseller of pre-paid cards, which has evolved into providing white label payments and banking-as-a-service technology with a pan-European footprint.
The firm offers payments and digital banking services, e-wallets and payout/distribution programmes, regulatory Electronic Money Institution status and flexible software to enable the delivery of transactional banking and other payment services to their end-user base without becoming a regulated entity.
PFS operates across 24 countries and supports more than 26 currencies. Its key customer segments include blue-chip financial institutions, non-financial corporates, SMEs, fintech companies, public sector and NOG bodies.
For the last 12 months till next June ending, PFS is forecast to process gross development value (GDV) of A$5.3bn ($3.63bn) and generate net revenue of A$84m ($57.6m) and EBITDA of A$24m ($16.46m).
EML managing director and Group CEO Tom Cregan said: “The acquisition of PFS continues to consolidate EML’s market position as one of the largest FinTech enablers in digital banking and prepaid globally.
“PFS is highly complementary to EML’s existing solutions suite and adds digital banking and multi-currency offerings to our existing suite, while expanding our global market footprint and ability to cross-sell PFS’s solutions.”
The acquisition value of £226m ($289m) includes £41m in EML Payments shares to be issued to the vendors at A$3.55 ($2.43) per EML share, and £185m ($237m) in cash.
The deal will be closed early next year
Subject to the completion of certain conditions, the deal is expected to be closed early next year.
The value also represents a 17.5 times PFS’ FY20 EBITDA pre-synergies and 14.0x PFS’ FY20 EBITDA post about A$6m of net run-rate synergies.
EML Payments stated that £11.5m ($14.7m) of cash consideration will be held in escrow for 12 months following the deal closure for claims made under the Acquisition agreement.
As per EML Payments, it will raise the finances required for the acquisition by providing entitlement offer amounting A$183m ($125m) and A$67m ($45.9m) through new and existing institutional shareholders.
In total, EML Payments will be issuing about 70 million additional shares in addition to the 22 million new shares issued under the vendor placement. The new shares will rank equally with existing EML shares.