Acquisition

5 November 2020

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation and is disclosed in accordance with the Issuer's obligations under Article 17 of the Market Abuse Regulation

PayPoint plc

(“PayPoint” or the “Company”)

 

PayPoint announces the acquisition of Handepay and Merchant Rentals

Important step forward in delivering enhanced growth and value in its core U.K. market

• Handepay is a well-established ‘top 4’ card payments business with over 21,000 merchants processing £3bn annually, with over 30,000 term leasing agreements with SME merchants for card payment terminals achieved through Merchant Rentals
• Enables reach into new SME sectors, including groceries, hospitality, food services and auto trade; very limited customer overlap with PayPoint’s existing card services
• Significant growth in last 5 years with £16.7m gross revenue and adjusted EBITDA of £5.4 million in FY ended 30 April 2020¹
• Earnings enhancing in first full year of ownership
• Resilient performance through the Covid-19 pandemic, reflecting diverse sector reach and higher levels of card usage, with proactive plan in response to the most recent national restrictions
• Best in class customer proposition, ranked no.1 card service processing provider on Trustpilot with a rating of 4.9/5
• Strong sales and support team, and adds capability to deliver a better proposition, onboarding and in-life customer experience to the combined PayPoint cards business
• Opportunity for synergies – combined share of the U.K. card merchant market of less than 5%, leading to opportunities within a growing and fragmented market
• Transaction of £70m (Enterprise Value) expected to complete in Q4 of current financial year, subject to regulatory approvals

PayPoint is pleased to announce that it has signed an agreement to acquire Handepay Limited (“Handepay”) and Merchant Rentals Limited (“Merchant Rentals”), leading card payments and card terminal leasing businesses, from a consortium of private investors. The cash consideration for the acquisition is expected to be £70 million on a cash free debt free basis, after closing balance sheet adjustments.