SafeCharge International Group, a U.K.-Israeli company founded by Israeli billionaire Teddy Sagi, is being acquired in an all-cash deal valued at $889 million by Nuvei Corporation, the Canadian payments technology firm said Wednesday.
The companies said SafeCharge shareholders would receive $5.55 in cash for each share, a 25% premium to the stock’s Tuesday closing price on the London Stock Exchange. The share price was up about 22% to 428 pence ($5.41) late Wednesday afternoon London time.
The deal comes as a time of aggressive consolidation in the electronic-payments industry. It follows a $35 billion deal by U.S. firm FIS to buy Worldpay this year as well as the market debuts of Britain’s Network International, Italy’s Nexi and UAE’s Finablr.
Sagi formed SafeCharge in 2007 with CEO David Avgi and now has a 68.3% share. In addition to the approximately $600 million Sagi will get from the sale he has collected some $100 million in dividends over the years.
SafeCharge said its shareholders would still receive the previously announced final dividend of 7.22 pence per share.
The company has developed a system for managing electronic payments for bank and alternative payment processors, enabling them to outsource online payments management. SafeCharge went public in London in 2014 at 162 pence a share, roughly a third what Nuvei will be paying.
SafeCharge employs about 400 people worldwide, about 120 of them in Tel Aviv’s Azrieli Sarona Tower. The rest work in offices in Britain, Bulgaria, Austria, the Netherlands, Singapore, Cyprus, Hong Kong and the United States.
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Its customers include McDonald’s, Domino’s Pizza, Ladbrokes and Nespresso as well as leading Israeli companies such as El Al Airlines and Migdal Insurance. Revenues grew 24% last year to $138.5 million as earnings before interest, taxes, depreciation and amortization climbed 11% to $37.3 million. Net profit, however, grew just 4% to $24.8 million.
Previously known as Pivotal Payments, the company renamed itself to Nuvei late last year. It is closely held but reportedly had sales in 2018 of $160 million and EBITDA of $60 million. It operates in the same segment as SafeCharge but is focused on the North American market while SafeCharge operates mainly in Europe and Asia.
Avgi said the two companies addressed diffrent markets – SafeCharge works with big companies and their online sales while Nuvei works with medium and smaller businesses and mainly in brick-and-mortar store sales.
“This is a market saturated with competition and regulation,” Avgi told TheMarker. “Small players won’t survive, so the consolidation is a good move for the company. The employees of the Israeli [research and development] center should be proud because the buyer is expected to adopt our technology as a core technology, while we will adopt its distribution system.”
Avgi said he expected to remain with the merged company, even though it wasn’t specified in the agreement.
“Our businesses are highly complementary from multiple perspectives including geography, technology, key verticals and customers,” said Nuvei CEO Philip Fayer in a statement. “We look forward to welcoming SafeCharge’s highly experienced management team and employees to the Nuvei family.”
Credit Suisse and Shore Capital are acting as financial advisers for Nuvei and SafeCharge, respectively.
In related news, Zebra Technologies said it planned to buy the Israeli startup Profitect, a provider of prescriptive analytics for the retail and consumer packaged goods. No price was reported by the two sides, but sources told TheMarket it was about $100 million, to be paid in a mix of cash and shares.
Founded in 2007, Profitect uses data from across the value chain for improving inventory and pricing accuracy, out of stocks, supply chain inefficiency, unsellable merchandise and assortment discrepancies. It has raised $22 million from investors over the years.
With reporting by Reuters and Irad Atzmon Schmayer