Paysafe Makes Splash in US Market, Buying Merchants’ Choice Payment Solutions

Paysafe Group (LSE:PAYS) will be making its largest purchase of 2017 thus far with the acquisition of Delta Card Services Inc. for $470 million. Delta Card Services Inc. operates as the holding company for popular Texas-based Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term processor Merchants’ Choice Payment Solutions (MCPS), which boasts nearly $14 billion in annualized sales.

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The recent acquisition is a huge stroke for Paysafe as it looks to make a splash in the North American market. By buying MCPS, the UK group will be able to dramatically bolster its market penetration on the continent, tapping into an addition 60,000 merchants across all fifty states. Moreover, MCPS’ work with small- and medium-sized enterprises (SMEs) will help grow a new segment for the payment solutions provider.

Stateside push

As a data-centric payment processor for both merchants and Independent Sales Organizations (ISOs), the MCPS acquisition will also be instrumental in helping Paysafe add to its growing Scalability Scalability Scalability is a term that describes the constraints of a network via hash rates to meet increased demand. In the context of Bitcoin, scalability reflects the issue in which a limited rate can process transactions adequately.Blocks within the Bitcoin blockchain are limited in both size and frequency. The overall transaction processing capacity of the network is dictated by the average block creation time of 10 minutes as well as a block size limit of 1 megabyte. Consequently, this leads to pain Scalability is a term that describes the constraints of a network via hash rates to meet increased demand. In the context of Bitcoin, scalability reflects the issue in which a limited rate can process transactions adequately.Blocks within the Bitcoin blockchain are limited in both size and frequency. The overall transaction processing capacity of the network is dictated by the average block creation time of 10 minutes as well as a block size limit of 1 megabyte. Consequently, this leads to pain Read this Term and product base for ISO merchants in the region. The $470 million cash deal will be funded via a deal underwritten by a consortium of BMO Capital Markets, Deutsche Bank, and other syndicators.

This will include a $380 million Incremental Loan Facility in tandem with $90 million in existing cash reserves. The deal follows on the heels of a successful 2016 campaign, which saw Paysafe report an all-time high of $1 billion in revenues as well as operating profits. In a recent disclosure earlier this year, group’s adjusted EBITDA margin was also on the uptick, climbing to $300.8 million in 2016 from $152.6 million in the year prior – a 97.1 percent ascension year-over-year.

Oמ MCPS’ part, the group saw revenues of $446 million in 2016 with asset values upwards of $90.4 million. By assimilating MCPS into its global operations, the deal will net an annual cost synergy of approximately $7.5 million, as well as other revenue synergy opportunities, per a recent Paysafe filing.

Shareholders may also not be the only beneficiaries of the deal, as MCPS is acquiring merchant portfolios from some of its ISOs, resulting in lower third-party fees payable to partners ahead of the acquisition.

Buyout?

Paysafe also has another potential deal on its hands, entailing a possible offer for the company itself. The group’s board has already received a preliminary offer from a plethora of funds, including Blackstone and CVC Capital Partners, for a potential all cash offer of Paysafe.

Under the current terms of the preliminary offer, ordinary Paysafe shareholders would be entitled to receive 590 pence in cash per ordinary share of company stock. The consortium is required by August 18 to announce its intention to make an offer for Paysafe – a date investors will likely be hawkishly tuning in for. The group's share prices (LON:PAYS) shot up over 9.3 percent to an all-time high of 591.5 pence during UK trading Friday following news of a potential offer.