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08.04.17

Paysafe Agrees to Buyout of Nearly $4 Billion

Paysafe Group Plc has reached an agreement to be acquired for £2.96 billion (US$3.89 billion) by private-equity groups Blackstone Group LP and CVC Capital Partners, the online payments company said Aug. 4.

The massive deal, valued at 590 pence per share, comes at a time of significant consolidation in the payments space and several years of considerable investment activity in fintech firms with a payments focus.

In early July, Cincinnati-based payments technology company Vantiv said it would pay $10 billion for U.K.-based processor Worldpay. And Chinese powerhouse Ant Financial is planning to purchase remittance giant MoneyGram for $1.2 billion if it can get the necessary regulatory approvals.

“As commerce shifts from physical to digital, there is a need for these types of businesses [acquirers/processors] to invest in connecting to a wide range of alternative payment options (handling local debit and credit schemes is no longer sufficient), cyber protection, advanced data analytics etc.,” writes Richard Johnson of U.K. IT analyst house TechMarketView, in an August report on payments M&A.

“All these demands argue for the advantages of scale which the Vantiv/Worldpay and various Wordline deals will provide if systems can be effectively integrated,” he adds. “This scaling may well result in margin compression on core transaction processing, which means that, as always in digital transformation, it is access to data and the ability to unlock the intelligence (the TechMarketView theme for 2017), which will be crucial for future sustainability.”

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