Paysafe Group, a UK-based payments provider, announced todayits intention to commence an inaugural share buyback programme of up to $124 million (£100 million).
The buyback programme comes just a week after the company incurred a massive share price decline falling by as much as 34 percent last Tuesday, after a document tied the group’s operations to illegal gambling in China.
The management and board of Paysafe believe that the current share price significantly undervalues the performance of the business to date and its future prospects. The company boasts a proven track record of significant cash conversion, which has been used to rapidly reduce its leverage since the announcement of the acquisition of Skrill and the associated debt fund raise in March 2015.
Furthermore, its solid balance sheet and cash generation now provide the opportunity to take advantage of prevailing market conditions to repurchase shares at highly economic levels and as a result provide immediate EPS enhancement.
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In the company’s continued pursuit of bold and strategic M&A opportunities, the management sees headroom for buybacks to remain attractive at levels well in excess of the current share price.
The maximum number of shares that the company will be able to purchase under the programme will be 48,110,871 ordinary shares in the capital of the company.
The programme will be undertaken using a phased approach and have a duration of 12 calendar months, subject to the buyback approval resolution being approved at the company’s next Annual General Meeting in respect of any purchases to be made after the date of that meeting. The purpose of the programme is to reduce the capital of the company; repurchased shares will be cancelled.
To facilitate the first phase of the programme, Paysafe has entered into an agreement with BMO Capital Markets to carry out on-market purchases of its ordinary shares.
Paysafe President and Chief Executive Officer Joel Leonoff commented: “I am pleased to announce Paysafe’s inaugural share buyback programme, which underlines our confidence in the business and its future prospects. The programme, and our track record of significant cash conversion, enable us to capitalise on current market opportunities without compromising our pursuit of bold M&A with a strong strategic fit.”