Payment firm SafeCharge says aiming for $100 million-plus acquisition
By Tova Cohen
TEL AVIV (Reuters) - Online payment service provider SafeCharge plans to make an acquisition costing $100 million (68 million pounds) or more in 2015 to expand its client base, and if necessary will raise money to do so, Chief Executive David Avgi said in an interview.
The London-listed company, which is majority-owned by Israeli billionaire Teddy Sagi, has $125 million in cash and a pipeline of opportunities in Europe and Asia, Avgi said.
After making two smaller purchases in December, the company is looking at the next level - $100 million or more, Avgi said.
"I believe we will look for companies similar to SafeCharge's core business," he told Reuters, adding he was seeking new clients in diverse geographical markets and industries. "I’m looking to buy a book of clients and migrate them to SafeCharge's platform."
For the right deal, SafeCharge will consider raising funds through bonds or equity, which would likely dilute the 66 percent stake held by Sagi, the founder of online gaming technology firm Playtech and backer of Market Tech Holdings, the owner of London's Camden Market.
SafeCharge provides online payment services and technologies. Clients include UK-based betting and gaming company Ladbrokes , games developer Gaijin and foreign currency broker FXDD.
Competitors include Global Collect, Adyen and Optimal Payments, which last week said it would buy the maker of the Skrill e-wallet for an enterprise value of 1.1 billion euros (799 million pounds).
While SafeCharge is a relatively small player in the global payments industry it has a tremendous potential for growth, said Numis Securities analyst Ivor Jones, who rates the shares a "buy" with a 350 pence price target.
"It typically offers a more comprehensive, international service than many of its much larger competitors," he said.
Registered in Guernsey with research and development centres in Israel, Bulgaria and Ireland, SafeCharge went public on London's junior AIM market in April at 1.62 pounds per share. The share price was unchanged at 255 pence on Tuesday, giving the company a market valuation of $600 million.
In December, SafeCharge paid 14.5 million euros for Ireland's 3V, which will provide the technology for a prepaid card issuing service which SafeCharge plans to launch this year. Its $8 million acquisition of Israel's CreditGuard, with customers like El Al, has given SafeCharge entry into the travel, telecom and energy markets.
SafeCharge's revenue rose 78 percent last year to $76.9 million while adjusted net profit was up 122 percent at $21.3 million.
December was a record month in terms of revenue and profit, Avgi said, adding: "The momentum of 2014 continued in the first three months of the year."
(Editing by Greg Mahlich)
