PayPoint is pleased to announce that it has signed an agreement to acquire Handepay Limited (“Handepay”) and Merchant Rentals Limited (“Merchant Rentals”), leading card payments and card terminal leasing businesses, from a consortium of private investors. The cash consideration for the acquisition is expected to be £70 million on a cash free debt free basis, after closing balance sheet adjustments.
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Card payments in the UK continue to grow and have been the preferred payment method since 2016, with significant increases in usage seen over the Covid-19 pandemic. However, there remains substantial growth potential, with circa 2 million SMEs still not accepting card payments. In line with the move to local convenience shopping, 81% of people claimed they would be more inclined to shop locally if they knew shops accepted cards2.
The acquisition of Handepay will create a combined national card payments business with significant customer diversity: over 30,000 SMEs, spanning the grocery, auto trade, clothing, household goods and hospitality sectors. The business comes with a strong and experienced management team who have successfully built a leading national cards business with broad industry reach. The group’s highly motivated sales and support teams deliver a comprehensive customer proposition with a 4.9/5 Trust Pilot rating.
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Leveraging these capabilities, alongside PayPoint’s existing 9,000 customer strong card payment estate, will enhance the end-to-end customer proposition and offering, accelerating the Company’s strategy in the U.K. cards market and broadening its growth prospects. Mark Latham, currently Chief Commercial Officer at Handepay, will join the PayPoint Executive Board as Card Services Director, responsible for the combined cards portfolio. Ian Kennedy, currently Sales Director at Handepay, will join the business as Sales Director leading both the PayPoint and Handepay sales teams, reporting to Ben Ford, PayPoint’s Retail Services Director. Andy Peake will continue as CEO of Handepay until completion, and then will act as a consultant to PayPoint.
Adjusted EBITDA in the financial year ended 30 April 2020 was £5.4 million3 and profit before tax was £2.5 million. The gross assets as of 30 April 2020 were £20.2 million.
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