PayPoint announces a further £10.5m investment in obconnect
August 01 2024 - 1:02AM
UK Regulatory
PayPoint announces a further £10.5m investment in obconnect
PayPoint Plc
1 August 2024
PayPoint announces a further £10.5m
investment in obconnect
In July 2022, PayPoint Plc
(“PayPoint”) made a minority investment in
obconnect (the “Company”), an early-stage
technology platform with the capabilities to provide complete
market ecosystems across Open Banking, Finance, Data, Energy,
Confirmation of Payee and Enhanced Fraud Data. This investment and
partnership with obconnect have enabled PayPoint to leverage this
technology platform and range of capabilities, offering Open
Banking services to both new and existing clients. At a time when
the number of applications for Open Banking is growing rapidly,
this technology has been an important addition for PayPoint and its
clients. As a result, this partnership has delivered on our
expectations and the Group has already made strong early progress,
with over 25 clients contracted for Open Banking services,
including American Express and Citizen’s Advice, along with a
growing pipeline of opportunities across new and existing clients.
Over the same period, obconnect as a standalone business has made
significant progress, securing contracts with a number of banks and
building societies, winning industry recognition at the Open
Banking Expo Awards and is on track to achieve profitability in H2
2024.
Given this progress, PayPoint today announces
that it has agreed to make a further strategic investment in
obconnect, increasing its interest to 59.3% of the Company. This
investment will further leverage obconnect’s Open Banking
technology platform and unlock greater opportunities within both
the PayPoint business and obconnect’s new business streams working
with a number of key financial institutions and payment
organisations. Open Banking is important to the future of PayPoint
and this investment will enable the Group to consolidate its
position further, recognising a modest financial contribution in H2
FY25, with a more meaningful contribution in FY26 and
thereafter.
The investment comprises the £3.0 million
original convertible loan note, which will now be converted into
ordinary shares along with a new investment of £10.5 million in
cash which, combined, will give PayPoint a 59.3% interest in
obconnect.
The agreement also includes a put option for
PayPoint to obtain the remaining 40.7% of obconnect for a total
cash amount of up to of £20.0 million, with the consideration
dependent on the future performance of the Company. The put option
is exercisable over three annual installments commencing 31 March
2025 with up to 10% puttable by March 2025, up to 25% (in
aggregate) by March 2025 and up to 40.7% by March 2027.
The investment is subject to regulatory
approval, with completion expected in early October.
Nick Wiles, CEO of PayPoint
said:
“‘We’re delighted to be taking majority
ownership of obconnect and strengthening the partnership we have
forged over the past two years. The obconnect team, led by Darran
Morford, will continue to drive further growth opportunities in the
Open Banking sector for the business and this investment further
underpins our confidence in achieving our target of £100m EBITDA by
the end of FY26.”
Darran Morford, CEO of obconnect
said:
“PayPoint have been the perfect partners for
us over the past two years and we’re pleased to be cementing that
partnership to fuel further growth in the next few years. Our
mission to deliver industry-leading technology solutions in Open
Banking and Confirmation of Payee (CoP) across the world, and we’re
delighted to be working more closely with PayPoint to unlock
further opportunities in this fast-growing sector.”
PayPoint plc |
FGS
Global |
Nick Wiles,
Chief Executive (Mobile: 07442 968960) |
Rollo
Head |
Rob Harding,
Chief Financial Officer (Mobile: 07525 707970) |
James
Thompson |
|
(Telephone:
0207 251 3801) |
|
(Email:
PayPoint-LON@fgsglobal.com) |
ABOUT PAYPOINT GROUP
For tens of thousands of businesses and millions of consumers,
we deliver innovative technology and services that make life a
little easier.
The PayPoint Group serves a diverse range of organisations, from
SME and convenience retailer partners, to local authorities,
government, multinational service providers and e-commerce brands.
Our products are split across four core business divisions:
- In Shopping, we enhance retailer propositions and customer
experiences through EPoS services via PayPoint One, card payment
technology, Counter Cash, ATMs and home delivery technology
partnerships in over 60,000 SME and retailer partner locations
across multiple sectors. Our retail network of over 28,000
convenience stores is larger than all the banks, supermarkets and
Post Offices put together
- In E-commerce, we deliver best-in-class customer journeys
through Collect+, a tech-based delivery solution that allows
parcels to be picked up, dropped off and sent at thousands of local
stores
- In Payments and Banking, we give our clients and their
customers choice in how to make and receive payments quickly and
conveniently. This includes our channel-agnostic digital payments
platform, MultiPay, offering solutions to clients across cash, card
payments, direct debit and Open Banking. PayPoint also supports its
eMoney clients with purchase and redemption of eMoney across its
retail network.
- In Love2shop, we provide gifting, employee engagement, consumer
incentive and prepaid savings solutions to thousands of consumers
and businesses. Love2shop is the UK’s number one multi-retailer
gifting provider, offering consumers the choice to spend at more
than 140 high-street and online retail partners. Park Christmas
Savings is the UK’s biggest Christmas savings club, helping over
350,000 families manage the cost of Christmas, by offering a huge
range of gift cards and vouchers from some of the biggest high
street names, including Argos, Primark and B&M.
Together, these solutions enable the PayPoint Group to create
long-term value for all stakeholders, including customers,
communities and the world we live in.
ABOUT OBCONNECT
obconnect is an all-in-one technology provider, providing all
the components needed for seamless end-to-end processing. Our
cloud-native and API-driven approach, ensures real-time and
efficient operations. With a scalable and resilient infrastructure,
we maintain continuous availability across all our Open Banking and
Ecosystem products.
Designed to support Open Banking Financial-grade API (FAPI)
compliance, our solutions prioritise security and functional
compliance. We prioritise the protection of customer data, ensuring
maximum privacy and security for our clients and their customers.
With obconnect, your data remains confidential and secure at all
times.
The book value of obconnect’s gross assets as at 30 November
2023 was £2.8m, with the Company recording a loss before tax of
£0.9 million for the year ended 30 November 2023. The Company is on
track to achieve profitability in H2 2024.
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