AIB and First Data edge closer to €100m purchase of Payzone

AIB and New York-listed financial services group First Data are close to agreeing to buying Payzone for about €100 million, more than two months after it first emerged the duo were circling the Irish payments company.

A deal is expected to be unveiled in the coming weeks, possibly before Easter, according to sources.

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 another private equity fund, Duke Street, in 2015 for €39 million.

Both AIB and CCI declined to comment. A spokeswoman for First Data, which is based in Atlanta, Georgia, didn’t respond to a request for comment.

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Payzone's executive chairman Mike Maloney and some other senior managers in the business are understood to own up to 10 per cent of the equity in the business, which once traded under the name Alphyra and had a troubled history following its 2007 merger with British ATM operator Cardpoint.

Consumer payments

The company is the largest consumer payments network in the country with more than 7,500 retail agents. It processes mobile phone and travel card top-ups, debit and credit card transactions, motorway toll payments as well as pre-paid utility and parcel collection services.

While AIB's new chief executive, Colin Hunt, told reporters on March 1st, just days before he took up the role, that the bank had "no plans to engage in any significant M&A [mergers and acquisitions] activity over the year ahead", a Payzone transaction would mark the biggest deal since the onset of the financial crisis in 2008.

That excludes the bank's forced takeover of ESB Building Society in 2011 under the direction of the State.

AIB has operated a debit and credit cards transactions joint venture called First Merchant Processing (Ireland) Limited (FMBI), trading as AIB Merchant Services, since 2007 with First Data.

It is Ireland’s largest provider of card acceptance services across retail outlets, supermarkets and fuel forecourts.

AIB rebrand

Separately, AIB’s First Trust Bank in Northern Ireland is to rebrand under its parent’s name from next year.

“Rebranding as AIB is a natural progression of our transformation given we are AIB in both the Republic of Ireland and Great Britain,” said Adrian Moynihan, head of the First Trust Bank, which was created in 1992.

First Trust is part of the group’s AIB UK division and operates 15 branches, including six co-located business centres and a hub for small and micro businesses, according to the group’s latest annual report. AIB has invested £10 million (€11.6 million) in the business in recent years, enhancing its products, services and digital capacity.

The lender is one of the four main retail banks in the North, alongside Ulster Bank, Bank of Ireland and Danish-owned Danske Bank.

“Today we are reinforcing our commitment to Northern Ireland with this investment to rebrand First Trust Bank so it aligns with the overall AIB Group,” said Mr Hunt.