Brookfield Business Partners (NYSE:BBU), along with private equity funds managed by Brookfield Asset Management Ltd., plans to acquire Network International Holdings Plc (LON:NETW) through a recommended cash acquisition. Meaning that Brookfield, through its subsidiary BCP VI Neptune Bidco Holdings Limited (Bidco), will purchase all the shares of Network that it doesn’t already own. The acquisition will be carried out using a scheme of arrangement under the Companies Act.
Under the terms of the offer, Network shareholders will receive 400 pence in cash for each Network share they hold. This offer represents a premium of around 64% compared to the closing price of Network shares on April 12, 2023, and a premium of 49% based on the average price of Network shares for the three months ending April 12, 2023. The total value of the offer is approximately £2.2 billion.
The acquisition is based on an enterprise value multiple of approximately 15.7 times Network’s EBITDA for the year ended December 31, 2022. The offer assumes that Network shareholders will not receive any dividends or other returns of value after the announcement date. However, if any such payments are made before the acquisition is completed, Bidco has the right to reduce the offer accordingly.
The cash consideration for Network shareholders will be financed through a combination of equity investment from Brookfield Business Partners and its partners, as well as funding from First Abu Dhabi Bank PJSC, Mubadala Investment Company PJSC, Abu Dhabi Developmental Holding Company PJSC, and Olayan Financing Company. The Interim Lenders under the Interim Facilities Agreement will also provide committed funding.
Brookfield believes that Network is a highly attractive business with a strong position in the Middle East and Africa (MEA) payments space. It has a well-integrated platform, a diverse customer base, regulatory licenses, and relationships with banks across multiple countries. Brookfield sees strategic value in combining Network with Magnati Sole Proprietorship LLC, another payments company in which Brookfield has a majority stake and First Abu Dhabi Bank owns the remaining 40%. This combination could create a major player in the MEA payments market and generate significant synergies.
The directors of Network, after receiving advice from financial advisors, consider the terms of the offer to be fair and reasonable. They intend to recommend that Network shareholders vote in favor of the acquisition. The offer is subject to approval from Network shareholders and regulatory authorities in the UAE, Jordan, Nigeria, and South Africa.
Network is a leading provider of digital commerce solutions in the MEA region, operating in over 50 countries. It offers a wide range of technology-enabled payment services to merchants and financial institutions. Network has two main divisions: Merchant Services and Outsourced Payment Services. It has built strong relationships with merchants, financial institutions, and payment networks over the past 25 years.
Network International Holdings plc operates as a digital commerce enabler in the Middle East and Africa. The company provides technology-enabled payment solutions to merchants and financial institutions. It also offers merchant solutions, which include payment solutions, such as N-genius payment device, N-genius mobile app, mobility, and unattended solutions; and N-Genius online, buy now pay later, and DPO pay online payment solutions. In addition, the company provides value-added services, including SmartView interactive dashboards, SmartView performance report, dynamic currency conversion, multicurrency online, easy payment plan, 3D secure, and network self-services; and acquiring processing and smart bundle solutions. Further, it offers card and processing solutions comprising debit and credit card, prepaid card, and commercial card solutions; fraud solutions; loyalty solutions; instant issuance, card control, 3D secure, SmartView, API, and payment plan services; and issuer services. Network International Holdings plc was founded in 1994 and is headquartered in Dubai, the United Arab Emirates.
The acquisition timetable and conditions will be provided in the Scheme Document, which will be published within 28 days of this announcement.
