PI UK Bidco to acquire Paysafe Group for GBP2.96 billion

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Paysafe Group, a payment processing major said it will be acquired by PI UK Bidco, a consortium a newly formed company jointly-owned by a consortium of funds managed by Blackstone and funds managed and or advised by CVC.

For the acquisition, GBP2.96 billion will be paid to Paysafe’s shareholders.

Pi Topco Limited, an indirect holding company of Bidco, has entered into a share purchase agreement with Spectrum Global Limited, whereby Paysafe Merchant Services Limited, a subsidiary of Paysafe through which it conducts Paysafe’s Asia Gateway business, will be sold to Spectrum Global Limited.

It is anticipated that, subject only to receipt of mandatory regulatory clearances, completion of the PMSL Disposal shall occur upon completion of the Acquisition. The Neteller business of PMSL shall be retained within the Paysafe Group as part of the PMSL Disposal. If the Acquisition is not completed, the PMSL Disposal shall not occur. Paysafe’s Asia Gateway business generated EBITDA of approximately $50 million in the twelve months ended 31 December 2016 on revenue of approximately $131 million. The consideration payable by Spectrum Global Limited will be deferred beyond an initial amount of $5 million. The total consideration to be paid is not certain but will not exceed $308 million payable over a six year period.

The Paysafe Independent Directors, who have been so advised by Lazard as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Paysafe Independent Directors, Lazard has taken into account the commercial assessments of the Paysafe Independent Directors.

Accordingly, the Paysafe Independent Directors intend to recommend unanimously that Paysafe Independent Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, as the Paysafe Independent Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 74,863 Paysafe Shares (representing, in aggregate, approximately 0.02 per cent. of the Paysafe Shares in issue on 3 August 2017.

Bidco and Paysafe have received irrevocable undertakings and letters of intent to vote or procure votes in favour of the Scheme at the Court Meeting with respect to a total of 57,972,626 Paysafe Shares (representing approximately 12.21 per cent. of the Paysafe Shares in issue on 3 August 2017 (being the last Business Day prior to this Announcement)), excluding the Paysafe Shares held by Joel Leonoff and Brian McArthur-Muscroft who are unable to vote at the Court Meeting. Full details of the irrevocable undertakings and letters of intent received by Bidco and Paysafe are set out in Appendix III to this Announcement.

 Bidco is a newly incorporated company, formed on behalf of, and which is jointly-owned on a 50:50 basis by, the Blackstone Funds and CVC Funds, for the purpose of implementing the Acquisition.

 Blackstone, founded in 1985 and publicly listed since 2007, is one of the world’s leading investment firms with assets under management of over $371 billion, as at 30 June 2017.

CVC, founded in 1981, is a leading global private equity and investment advisory firm. The CVC Funds have a diverse portfolio of investments in more than 50 companies worldwide, and together these companies have combined annual sales of approximately $55 billion.

It is intended that the Acquisition be implemented by way of a Court-sanctioned scheme of arrangement under section 152 of the Isle of Man Companies Act 1931. The purpose of the Scheme is to provide for Bidco to become the owner of the whole of the issued and to be issued ordinary share capital of Paysafe. The Scheme will be put to Paysafe Independent Shareholders at the Court Meeting and to Paysafe Shareholders at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Paysafe Independent Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted. The implementation of the Scheme must also be approved by Paysafe Shareholders at the General Meeting and the Paysafe Independent Shareholders will also be asked to approve the Director Manager Arrangements.The Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. The Conditions include the receipt of various Regulatory and Anti-trust Approvals as further described in this Announcement. Shareholders should take note of the Regulatory and Anti-trust Approvals, which include financial services authority clearances in the UK, the Isle of Man, Switzerland and Mauritius and anti-trust clearances in the European Union, the United States, Canada, China and Turkey, contained in Part A of Appendix I (see paragraph 6 below).

The Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. The Conditions include the receipt of various Regulatory and Anti-trust Approvals as further described in this Announcement. Shareholders should take note of the Regulatory and Anti-trust Approvals, which include financial services authority clearances in the UK, the Isle of Man, Switzerland and Mauritius and anti-trust clearances in the European Union, the United States, Canada, China and Turkey, contained in Part A of Appendix I.

 The Scheme Document will include full details of the Acquisition, together with notices of the Court Meeting and General Meeting and the expected timetable and will specify the action to be taken by Paysafe Shareholders. The Scheme Document will be despatched to Paysafe Shareholders within 28 days of the date of this Announcement, unless Bidco and Paysafe otherwise agree, and the Takeover Panel consents, to a later date.

The Acquisition is expected to complete in the fourth quarter of 2017, subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document.