UK’s Duke Street buys majority holding in Payzone

The investment, which comprises a €45m equity investment from Duke Street, provides capital for the AIM-listed company’s financial restructuring.

The Payzone business manages terminal networks in the UK, Ireland, Sweden, Greece and Romania, which process a variety of electronic transactions. The main services include mobile phone top-up, utility top-up, bill-payment solutions, electronic gift vouchers and Electronic Funds Transfer processing. The Cashzone business, one of Payzone’s divisions, deploys branded independent ATMs in the convenience sector in the UK and Germany.

The financial restructuring reduces Payzone’s level of senior secured debt from approximately €300m to €77m. As part of the process, Payzone’s seven bank lenders will become shareholders in the restructured group.

Payzone’s management team, led by chief executive Mike Maloney, will remain with the business and become shareholders, while Duke Street operating partner Bob Scott will become chairman of Payzone.

Charlie Troup, a Duke Street partner, said, “This opportunity plays extremely well to Duke Street’s key strengths of driving operational transformation, providing strategic input to management teams and providing long-term capital for growth. We have followed the business and the sector for some time and we see significant potential for development in Payzone’s core sectors and markets. The successful conclusion of the group’s financial restructuring will accelerate growth and provide a platform to generate attractive returns.”

Advent International last month bought Xafinity, a UK specialist in pension services and employee benefits, off Duke Street in a deal that has been valued at around £200m (€228.2m). Duke Street acquired Xafinity in 2005 in a £125m (€142.7m) management buy-out.

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