PayPoint (LON: PAY), a London-headquartered retail payments provider, announced on Monday its decision to acquire the entirety of Appreciate Group, a gifting and engagement company, in an £83 million deal.
The Board of the payment company approved the acquisition of Appreciate Group’s entire issued and to-be-issued share capital. The terms of the acquisition value Appreciate Group Share at 44 pence, putting the size of the deal at £83 million.
The shareholders of Appreciate Group will receive 33 pence along with 0.0190 New PayPoint shares for each Appreciate Group share. Furthermore, each Appreciate Group shareholder will receive and retain a dividend of up to 0.8 pence per share.
A Strategic Deal
“The PayPoint Board believes the proposed acquisition of Appreciate Group provides a compelling opportunity to acquire a highly complementary business with well-established offerings in prepayment savings and the corporate and consumer gift card and voucher sector,” said Nick Wiles, the CEO of PayPoint.
Additionally, he believes that the Appreciate Group's offerings and its brand partners provide “significant headroom for growth” in the consumer and corporate gifting markets within the United Kingdom. The acquisition is strategic as it will strengthen PayPoint’s payment offerings.
“The proposed acquisition would jointly target growth in three broad areas: prepayment saving through Park Christmas Savings to support customers with budgeting tools for Christmas and other events; an enlarged full-service offering for gifting, employee rewards and benefits to Appreciate Group’s corporate clients; and an extended consumer gifting network for the Love2shop brand,” Wiles added.
PayPoint sold its Romanian operations in 2020 for around £47 million on a debt-free cash-free basis. At that time, the company highlighted its priorities in the key UK market and even revealed plans to use the proceeds for acquisitions within the UK.
Meanwhile, the investors are critical of the acquisition, which can be inferred from the market performance of publicly-traded PayPoint shares. The price of PayPoint shares decreased by more than 7.4 percent as of press time after the markets opened on Monday.
Commenting on the acquisition, Appreciate Group’s Executive Chair, Guy Parsons, said: “PayPoint’s offer represents an attractive premium for Appreciate Group Shareholders providing an opportunity to exit the majority of their shareholdings for cash, whilst participating in the potential upside of the combined Appreciate Group and PayPoint businesses over the long-term.”
