Payment Specialist Paysafe in £6.8bn Merger
Sports betting payment specialists Paysafe plan to “accelerate growth” in the igaming market after the company agreed on a merger with Foley Trasimene Acquisition Corp. The new entity will be listed on the New York Stock Exchange.
Payment specialists Paysafe will merge with Foley Trasimene Acquisition Corp. II in a £6.8bn deal which will facilitate the listing of Paysafe on the New York Stock Exchange. The listing will be under the symbol PSFE and is backed by 75-year-old billionaire Bill Foley.
The announcement of the deal confirmed reports on Sunday that an agreement was close. Shares in Foley Trasimene surged 12% pre-market when Reuters reported news of the deal.
The deal is a profitable one for Blackstone and CVC Capital who purchased Paysafe for £3bn in 2017.
Philip McHugh, who will remain chief executive of Paysafe following the deal, explained that the company planned to expand its digital wallet offering and indicated that the company viewed acquisitions as the key to achieving this. With McHugh stating that the emerging sports betting market in the US being the target territory.
Financing for the deal cames in part from a private investment in public equity (PIPE), which is worth $2bn, which includes a joint $500m investment from National Title Insurance Co., Chicago Title Insurance Co., Commonwealth Land Title Insurance Co. and Fidelity & Guaranty Life Insurance Co.
Once the deal is complete, Bill Foley will become chair of the board of directors.
Foley said: “Thanks to the hard work of our team, we have reached this milestone with Paysafe as our ideal partner. Philip and the entire management team have positioned Paysafe to be a leading global payments platform,”
“We believe we can further enhance Paysafe’s growth trajectory through accelerated operational transformation and M&A, enabled by our de-levered balance sheet.
“Paysafe delivers a unique value proposition in large and high-growth markets, such as gaming and e-commerce, enabling the company to generate strong organic revenue growth and margin expansion,”
This transaction will allow us to accelerate our growth opportunities across the business, particularly in fast growth sectors such as igaming where we are the payments partner of choice.– Bill Foley, Paysafe chair-elect.
While Foley believes the future growth of Paysafe is in the emerging US market, the company’s brands in the UK have encountered problems and have been effectively banned by many major operators in the UK.
In October last year, Bet365 stopped accepting Skrill and Neteller, both part of the Paysafe group. Bet365 did not explain the rationale for the decision, but it is believed that the payment methods were used to abuse bonuses offered by bookmakers.
Industry insiders state that Skrill and Neteller accounts offer a degree of anonymity, enabling professional bettors and syndicates to use them to open up multiple accounts. They then use these new customer promotions to either increase bankroll or by matching bookmakers, use two free bets to create a no-lose scenario.
Bet365 are not alone in banning Skrill and Neteller, Sky Bet and William Hill do not accept the payment method for customers in the UK.