State banks strong return from Payzone €100m sale to AIB/First Data
The State is understood to have made a return of four-and-a-half times its investment in Payzone through a stake held by Isif in Carlyle Cardinal Ireland.
As first revealed by the Sunday Independent, Carlyle Cardinal Ireland (CCI) put the payments company on the market last summer.
Earlier this month it was announced that Payzone was being acquired by a newly-formed joint venture established by AIB and First Data Corporation.
CCI bought the business for around €39m in 2015 and the recent sale price is worth up to €100m. About half the initial investment in Payzone was leveraged, boosting the return on the deal, while dividends were also paid to shareholders in the period before the sale.
The company grew significantly over the past four years. Daragh Lane, Cardinal Capital Group said at the time of the sale: "When CCI acquired a majority shareholding in Payzone four years ago it processed 61 million transactions a year, delivering a gross transaction value of €1bn to its customers. Today it processes 125 million transactions a year delivering in excess of €2bn of value to its customers and is a well-established Irish fintech organisation that drives significant innovations across many traditionally cash-based markets."
Cardinal has also delivered a 16pc return annually to Isif on its Cardinal Mezzanine fund, it is understood. That return came from backing high-risk, high-return deals such as Johnny Ronan's redevelopment of the AIB HQ for Facebook.
The fund provides subordinated real estate debt financing for investment, development and loan refinancing.
The typical loan size is between €5m and €50m per transaction.
Sunday Indo Business