Payzone sold by backers to private equity fund
Payment processing business Payzone Ireland has been sold by its private equity backers Duke Street in a deal understood to value the Irish operations at €30m to €40m.
Carlyle Cardinal Ireland (CCI), a private equity fund founded two years ago by US-based Carlyle Group and Cardinal Capital Group, an Irish investment house, announced the deal yesterday.
CCI has agreed to acquire Payzone Ireland from Duke Street, which led a 2010 buyout of the company and held an 80pc stake in the business.
Staff at Dublin headquartered Payzone are understood to have been briefed on the sale yesterday.
The change in ownership will have no impact on the day-to-day business operations of Payzone in Ireland, CCI said in a statement.
Incumbent management including Mike Maloney, Jim Deignan and Nigel Bell, will remain in their roles and will retain an ownership stake under the new deal.
Payzone provides a variety of payment services in Ireland, ranging from machines that allow customers to pay utility bills to the M50 toll payments service E-Flow. It also runs Dublin's Leap Card transport payment system and a mobile payments service for car parking.
The company developed out of the 2007 merger of Irish e-payments group Alphyra and British ATM operator Cardpoint.
Peter Garvey, director of Carlyle, said: "As well as being a prominent and reputable brand in Ireland, Payzone is a high quality business with a great management team who have helped grow and diversify the business in recent years. CCI's extensive experience in backing consumer and financial services businesses means that we are well placed to work with Payzone's leadership to continue their growth journey in the coming years."
Equity for the investment will come from CCI, a €292m Irish private equity fund focused on growth capital and buyout investment opportunities across Ireland.
Its backers include the State through the Ireland Strategic Investment Fund and Enterprise Ireland.
The operations of Payzone UK and Payzone Romania, the two remaining businesses in the original Payzone Group which is in the process of being broken up, are unaffected by the deal.
Duke Street bought an initial 69pc stake in the larger Payzone group under a €104m restructuring deal in 2010.
Under the deal lenders including AIB, Bank of Scotland and RBS agreed to reduce the companies debt from €300m to €77m in exchange for a 16pc stake, Duke Street invested €45m for its majority shareholding.
The previous shareholders were wiped out under the debt-for-equity swap deal.
Since then, the owners have recouped their investment through disposals including of ATM businesses in the UK and Germany to ATM services provider Cardtronics for €125m.