LONDON: UAE payment processing firm Network International has closed a $350 million-equivalent, six-year loan to finance the acquisition of Emerging Markets Payments (EMP), a payments processing company with its main operations in Africa and the Middle East, banking sources said on Monday.
The dual-currency financing is split almost evenly between a conventional dollar tranche and a murabaha dirham tranche, one banker close to the deal said.
Citigroup acted as the sole underwriter and coordinator on the deal and was joined in syndication by around nine international banks, the banker said.
After strong demand in syndication the pricing was reverse flexed by 25bp with final pricing coming in at 350bp for the dollar tranche and 325bp for the dirham tranche.
The bolt-on acquisition follows the 49% acquisition of Network International by sponsors Warburg Pincus and General Atlantic in December 2015 for US$275 million. Dubai’s largest bank, Emirates, owns the rest.
That deal was structured at the Warburg Pincus/General Atlantic level through a specific ‘holdco’ vehicle — created by the sponsors for the acquisition.
Citigroup, Commercial Bank International and First Gulf Bank were underwriters, bookrunners and mandated lead arrangers on that financing, while Al Khaliji Commercial Bank, Al Khaliji France and Commercial Bank were mandated lead arrangers.
The new deal has been done at the Network International ‘OpCo’ level — with a majority of the lenders to the HoldCo financing joining this new deal.
“The mission from the beginning was to grow the business through acquisitions. The ability to take on leverage at the Network International — OpCo level — was written into the initial financing structure. This deal was very much anticipated and happened very quickly,” the banker said.
As a result of the strong demand for the new financing, the sponsors were also able to amend the leverage covenants at the HoldCo level and increase the HoldCo leverage from 5 times to 5.75 times, the banker said.
Network International is buying its rival EMP from private equity firm Actis, in a deal which will create the largest payments processor in the Middle East and Africa.
Network International, Warburg Pincus and General Atlantic were not immediately available to comment.