Paysafe Readies for Stock Market Return through SPAC Merger
Paysafe is a London-based payment services provider that offers services under the Paysafe brand and through a number of other brands operating under its umbrella, including NETELLER and Skrill. The company’s eWallets and other payment products are heavily used in the gambling industry.
Paysafe has agreed to merge with special purpose acquisition company (SPAC) Foley Trasimene Acquisition Corp II. The transaction is expected to close in the first half of 2021. When this happens, Paysafe will list on NASDAQ under the ticker symbol ‘PSFE’, news emerged Monday.
Mr. Foley said that the payments giant has been at the top of his list of merger targets because it has different scalable businesses and is in a great position.
Paysafe’s Chief Executive Philip McHugh said that the company plans to expand its digital wallet portfolio by acquiring several players in this highly competitive space as well as to cement itself in the nascent but fast-growing US sports betting market. Mr. McHugh will retain his role after the company’s merger with Foley Trasimene.
A Stock Market Return
The recently announced merger will mark a stock market return for Paysafe which was delisted from the London Stock Exchange in December 2017 after buyout firms Blackstone Group and CVC Capital Partners acquired the company earlier that year.
Reports emerged in the fall of 2019 that Blackstone and CVC were in the middle of preparations to list Paysafe and that the payments processing firm could value at more than $10 billion, including debt, in a potential IPO.
In November, a renewed round of listing reports suggested Paysafe’s backers have restarted discussions with potential advisers about taking the company public either through an IPO or through a merger with a blank-check company.
CVC and Blackstone will be Paysafe’s largest investors after its planned SPAC merger and listing. Blackstone Senior Managing Director Martin Brand said that retaining the majority of their investment would allow the buyout company to benefit from Paysafe’s anticipated strong performance.
SPAC mergers have this year taken hold of public markets as one of the most interesting trends of 2020. Executives see a combination with blank-check companies as a quick way to get their own businesses to market with a potentially bigger fund raise and less complexity than the traditional IPO process.
And fintech companies such as Paysafe seem to be the next hot SPAC market as more people have been shopping online during the Covid-19 pandemic and have been making more of their payments online.
Paysafe is the latest payments firm to go public via a SPAC combination after Paya and Billtrust announced and completed similar deals earlier this year.
It should be noted that the SPAC trend has swept the online gambling industry as well. Three US-based digital gaming and betting companies have announced SPAC tie-ups in recent months, with those being DraftKings, Golden Nugget Online Gaming, and Rush Street Interactive.
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