Venture capital companies Blackstone and CVC are making a joint bid for Paysafe Group.

Offer for Paysafe

The proposed all-cash offer has been on the table since early May and subsequent negotiations have led to a potential offer of 590 pence per share.

This represents a premium of 35 per cent on the average price of Paysafe shares for the six months to June 30. Paysafe’s largest shareholder is Old Mutual Global Investors (UK), which has supported the sale in respect of the 10.3 per cent of Paysafe shares it holds.

The news came as Paysafe itself moved to acquire Delta Card Services, the international supplier of payment solutions. Delta is the holding company for Merchants’ Choice Payment Solutions, a payment processor for merchants and independent sales organisations and is based in Shenandoah, in the US state of Texas.

MCPS delivers card-processing services to around 60,000 businesses in 50 states of the US and processes more than US$14bn in sales volume each year.

The acquisition widens Paysafe’s processing scale in North America and the addition of POS activities to Paysafe’s processing division strengthens its ability to process POS, online and order ahead payments.

The acquisition cost Paysafe $470m in cash, of which $380m is in the forms of loans and the remainder from cash reserves. In the year to the end of December, 2016, MCPS reported revenue of $446m and its gross assets were valued at $90.4m.

Commenting on the Delta deal, Peter Gray, partner and joint head of financial services at Cavendish Corporate Finance, said: “The acquisition… reduces the firm’s exposure to the online gambling market from approximately 46 per cent to 35 per cent. The deal comes on a busy day for Paysafe as it is announced a possible $3.7bn joint bid for the payments processing giant from CVC and Blackstone. 

"The current flurry of M&A activity in this sector looks set to continue, as payments firms become hot property as cash payments are progressively replaced by digital payment methodologies."