European buyout fund Eurazeo has hired Citigroup and Evercore to prepare the sale of its payments business Planet in a deal that could value the Irish firm at up to 2 billion euros ($2.22 billion), three sources told Reuters.
Eurazeo wants to launch an auction process in March as it seeks to capitalise on the rise of online shopping and mobile phone payments, two sources with knowledge of the matter said.
Citi and Evercore won a contest in December to handle the sale, which comes just days after U.S. private equity firm Silver Lake agreed to merge Planet’s rival Global Blue with Far Point – a vehicle set up by hedge fund Third Point and led by the former president of the New York Stock Exchange.
Eurazeo declined to comment. Citi and Evercore were not available for immediate comment.
Planet, based in Galway on Ireland’s west coast, serves more than 400,000 merchants and 100 partner banks and provides both tax refunds and a wide range of payments services.
Paris-based Eurazeo took control of New York-listed Planet Payment in 2017 through Fintrax Group, a portfolio company which specialised in currency-conversion services that enabled card holders travelling abroad to pay for goods in their own currency.
The combined group was rebranded Planet and has since grown its international presence, employing more than 1,500 staff in 64 markets across five continents.
Eurazeo is looking to cash out at a multiple of 15 to 20 times Planet’s core earnings of more than 100 million euros, two of the sources said, with the final price tag expected to be comfortably above 1.5 billion euros.
The sale will target Asian and Western companies as well as other investment funds, one of the sources said.
Planet’s closest competitor is Dutch payments specialist Adyen which was listed in Amsterdam in 2018 by a pool of investors including General Atlantic and Temasek.
Adyen, which processes payments for companies including Airbnb and Netflix, has a market value of 23.5 billion euros and trades at 56 times its expected core earnings.
Other European payments firms such as Worldline and Nexi trade at roughly 18.5 times their expected core earnings, according to Refinitiv data.
Growth in payment systems has kept deals rolling even as potential mergers in other sectors have stalled on concerns about trade tensions and a global economic slowdown.
Once a backwater of banking, the payments sector is now lucrative and fast-growing and is attracting growing interest from private equity investors.
Blackstone and CVC are currently exploring a possible listing of Britain’s Paysafe Group.
Source: Reuters.com