EML Payments has finalised its acquisition of Meath-based Prepaid Financial Services after price renegotiations based on the current ‘economic reality’.
Australian fintech company EML Payments has completed its acquisition of Meath-based Prepaid Financial Services (PFS), with a €105m discount on the original purchase price.
When the deal was announced in November 2019, the Brisbane-based company was set to acquire PFS for an up-front value of £226m and an earn-out of £55m, subject to meeting certain earnings targets.
However, in light of the current economic situation caused by the spread of Covid-19, EML, which issues mobile, virtual and physical card solutions to corporate brands, said that the terms of the deal were dictated by the “economic reality” that businesses and individuals are currently facing.
In a statement today (1 April), PFS said that the terms of the original deal were renegotiated in recent weeks. EML will now acquire the Meath fintech firm for £131.5m (€148.9m).
Noel Moran, CEO of PFS, said: “Our original deal was on track to close, until recent weeks when Covid-19 started to have an impact on global stock markets. With share prices plummeting around the world, the value of fintechs was similarly affected.
“In light of the current worldwide business reality, I believe we have achieved a great result for everyone involved. We are eager to play a pivotal role in complementing EML’s sizeable international and diversified electronic money portfolio.”
Trim-headquartered PFS provides e-wallets, physical and virtual prepaid cards and accounts, and current accounts in both the UK and the Eurozone. It was founded by husband and wife Noel and Valerie Moran in 2008.
In 2018, the business reported more than €50m in revenue and earnings before interest, taxes, depreciation and amortisation of €6.2m. It has bases in Ireland, the UK and Malta.
When the acquisition deal was announced late last year, Tom Cregan, CEO of EML Payments, said: “PFS is highly complementary to EML’s existing solutions suite and adds digital banking and multi-currency offerings to our existing suite, while expanding our global market footprint and ability to cross-sell PFS’s solutions.”
This week, in a statement to investors, EML said: “The board of EML was committed to seeking a conclusion to the transaction, but on improved terms reflecting the economic reality of Covid-19 and the need to have a strong balance sheet with significant cash on hand and nil-net debt.
“The parties have worked collegially to restructure the transaction in order to best position the go-forward combined business.”