Nuvei to acquire SafeCharge in $889m deal
Payment processing solutions provider Nuvei Corporation has reached an agreement on the terms of an all-cash deal to acquire payment technology business SafeCharge International.
Texas-headquartered Nuvei, via a wholly owned subsidiary Nuvei Bidco, will acquire the entire issued and to-be-issued ordinary share capital of SafeCharge.
It will pay $5.55 - or £4.36 based on the exchange rate at the time of the announcement - in cash for each SafeCharge share, representing a 25% premium on the closing price of £3.50 per share on May 21.
This also represents a 41% premium on SafeCharge’s three-month, volume-weighted average share price of £3.09 to May 21, and values SafeCharge at approximately $889m.
The SafeCharge board believes that these terms are in the shareholders’ best interests, with its directors committing to selling their 3,443,579 shares, representing 2.3% of the company’s issued shares.
"The board is unanimously recommending this all-cash offer by Nuvei to buy SafeCharge at an attractive premium, which represents compelling value for SafeCharge shareholders,” SafeCharge chairman Roger Withers said.
“The price premium Nuvei is offering reflects SafeCharge's leading position in the high growth e-commerce payments market, the strength of its own technology platform, its diversified and stable customer base and the significant experience in the payments industry of SafeCharge's management team.
“It is for these reasons that the board is unanimously recommending this transaction to SafeCharge shareholders."
In addition, the payment processor’s largest shareholder, Playtech founder Teddy Sagi, who holds 103,995,185 SafeCharge shares, or 68.3% of its share capital, has committed to backing the acquisition.
SafeCharge chief executive David Avgi said that both his company and Nuvei had built up strong positions with minimal geographic, customer or industry overlap.
“The acquisition should enable SafeCharge to benefit from Nuvei's North American footprint and sales and marketing capability to fulfil and accelerate its growth ambitions,” Avgi explained.
“The board believes that our businesses have similar shared entrepreneurial cultures and is confident that Nuvei's plans to invest in and grow the SafeCharge business mean the proposed transaction is positive for SafeCharge and its stakeholders as a whole.”
Shareholders will remain entitled to a final dividend of 7.22 pence per share, as announced following the publication of the company’s full-year results for 2018. This is to be paid on May 24.
"We are very excited about the combination of SafeCharge and Nuvei, which will create a truly global, leading, payments technology solution provider with significant scale,” Nuvei chairman and CEO Philip Fayer said. “Our businesses are highly complementary from multiple perspectives including geography, technology, key verticals and customers.
“We think the technology platform SafeCharge has developed is exceptional and will serve as the go-forward foundation from which we will continue to grow the combined business and provide best-in-class products and services to our customers and partners.
“Lastly, we look forward to welcoming SafeCharge's highly experienced management team and employees to the Nuvei family.”
Once the deal is completed, Nuvei will work with SafeCharge’s senior management to evaluate its business operations, with a view to refining the structure of the new entity created through the acquisition. It warned that this may result in a reduction in staff employed in support functions such as finance, human resources, IT, operations and legal.
While a comprehensive plan had not yet been finalised, this was likely to see the combined company’s headcount reduced by up to 5%, it said.
The scheme document, setting out the full terms of the acquisition, and notices of the Scheme Court Meeting and General Meeting, at which SafeCharge shareholders will vote to approve the acquisition, will be published within 28 days.
It is expected that these meetings will be held in July, with a view to completing the transaction in the third quarter of 2019.
SafeCharge’s board has projected revenue in the range of $155m to $165m for its 2019 financial year, and adjusted earnings before interest, tax, depreciation and amortisation between $40m and $42m.