AIB and First Data confirm deal to buy Payzone for €100m

Joint venture will acquire 96% stake in payments company

AIB is bolstering its fintech abilities with a bid for Payzone.  Photograph: Crispin Rodwell/Bloomberg

AIB is bolstering its fintech abilities with a bid for Payzone. Photograph: Crispin Rodwell/Bloomberg

 

AIB and First Data have joined forces to buy consumer payments network Payzone, in a widely expected deal worth up to €100 million.

About €61 million will be in an initial cash consideration for almost 96 per cent of Payzone. That excludes €25 million of net debt, which the joint venture will settle when the deal is completed, with a further €11 million to be paid if the business meets certain conditions.

AIB will own a 75 per cent stake in the joint venture and First Data will take the remaining 25 per cent, subject to regulatory approval.

The remaining 4.1 per cent of the business is held by the Payzone management team, but AIB said a mechanism had been agreed to acquire that stake in time.

Payzone is the largest consumer payments network in the country, with more than 7,000 retail agents and more than 300,000 registered users. The company processes mobile phone and travel card top-ups, debit and credit card transactions, motorway toll payments as well as pre-paid utility, parking payments and parcel collection services.

Evolve

“For AIB, this transaction means acquiring significant fintech capability and Payzone’s substantial payments footprint in Ireland, ” said AIB chief executive Colin Hunt. “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.”

Talk of the deal with AIB and First Data has been circulating since January. Payzone’s current owner, Irish-American private equity firm Carlyle Cardinal Ireland, which is backed by the State’s Ireland Strategic Investment Fund (ISIF), put the business on the market last year, having acquired it from private equity fund Duke Street in 2015 for €39 million.

In its most recently available accounts, Payzone’s holding company Semeral Ltd posted earnings before interest, tax, depreciation and amortisation (ebitda of €8.3 million for the year to last September and had gross assets of €59 million.

Following the takeover, Payzone will continue to be led by chief executive Jim Deignan and chief financial officer Nigel Bell. The two executives will also remain as shareholders in the business.

Mr Deignan said the deal would be a positive move for Payzone, and was a vote of confidence in the business.

“We see significant opportunity to grow our footprint in the fintech sector and this can only be enhanced further with the backing and support of our new shareholders, who bring deep industry expertise to make things happen,” he said.