Private Equity’s Big Bets on Financial TechBy
Private equity firms are rushing to bet on financial technology.
Permira Capital Partners, Advent International and Bain Capital have all recently announced acquisitions of payment processors in the hope of capitalizing on the cashless zeitgeist. The Blackstone Group and CVC Capital Partners, which just offered $3.7 billion for Paysafe of Britain, are placing a double wager.
Paysafe’s quirk is that approximately half of its revenue comes from online gambling and gaming. Investors have struggled with the associated risks — notably from Paysafe’s Asian business, which brings in about a fifth of its earnings before interest, taxes, depreciation and amortization, or Ebitda. A short-seller’s report alleging unsavory dealings in China wiped 38 percent off the company’s share price last December. Though the stock recovered, Paysafe still suffers from a stubborn valuation discount to peers like Worldpay and Nets — both acquisition targets themselves…
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