Meath business started 11 years ago at kitchen table sells for €327m

Founder Noel Moran in line for €213m payout as Australian group buys Prepaid Financial Services

The deal could be worth up to £182 million to PFS founder Noel Moran.

The deal could be worth up to £182 million to PFS founder Noel Moran.

 

A Co Meath couple are due to get a payout of up to €266 million from the sale of their payment solutions provider to an Australian company.

Prepaid Financial Services (PFS) is being acquired for up to 526 million Australian dollars (€327 million) by an Australian payment solutions provider in a deal that will mean a payout of up to €213 million for founder Noel Moran.

Mr Moran controls 65 per cent of the company, while his wife, Valerie Willis, is in line for a €53 million payout given her 16.3 per cent stake in the group. A further 11.5 per cent is owned by two other executives and a former executive at PFS.

In an update to the Australian stock exchange, EML Payments said it had entered a binding agreement to acquire PFS for an up-front value of A$423 million – A$77 million of which will be in EML shares with the remainder in cash – plus an earn-out component of up to A$103 million. The earn-out component is contingent on PFS achieving agreed annual earnings targets during the three years after the deal closes.

It is unclear when EML first approached the Irish business. PFS had been publicising expansion plans as recently as September. The company said at that time it was investing €50 million to create a fintech hub in Trim, Co Meath.

The company, one of Ireland’s largest issuers of payment cards, also indicated plans to hire additional staff as it moved its Irish base from Navan to Trim. That followed a hiring spree that took place earlier this year, when it filled 50 jobs.

Founded in 2008 by Noel Moran, PFS is one of Europe’s largest issuers of e-money and is now active across 25 countries. Aside from its Irish base, where it employs more than 140 staff, the company has offices in Malta, London and Manchester.

E-money licence

In April, PFS was granted an e-money licence by the Central Bank of Ireland, adding to its regulation by the Financial Conduct Authority in the UK.

Among the company’s payment solutions are e-wallets, physical and virtual prepaid cards and IBAN accounts in the UK and euro zone. Its clients include governments, local authorities, NGOs, mobile network operators and banks.

The most recent set of accounts for Prepaid Financial Services (Ireland) Ltd, which reports in sterling, show the company made a £7.2 million (€8.11 million) net profit last year on sales of £64.75 million. That compares to a £3.7 million profit the previous year on revenues of £45 million.

“From humble beginnings over a decade ago, PFS started life at a kitchen table and now we are so happy to be listed on the Australian stock exchange as a result of this transaction,” Mr Moran said.

It has been a magnificent journey and I am excited about the possibilities and opportunities that this will bring to us over the coming years.”

EML, which plans to finance the deal through an equity fundraising and a new debt facility, noted that PFS is forecast to generate net revenue of 84 million Australian dollars (€52 million) in the year to June 30th, 2020 with earnings of 24 million Australian dollars.

“The acquisition of PFS continues to consolidate EML’s market position as one of the largest fintech enablers in digital banking and prepaid globally,” said EML group chief executive Tom Cregan.

The Australian company already has a presence in the Republic having acquired Perfectcard DAC in July 2018. In March of this year, it announced plans to expand its Galway operation by establishing a technology and innovation hub.

The deal is expected to complete early next year.