Canadian investment group Brookfield Asset Management has agreed to buy Middle East credit card processor Network International in a £2.2 billion deal, the latest private purchase of a London-listed company.
The network first emerged as a private equity takeover candidate in April when it announced that a consortium including CVC Capital Partners and US firm Francisco Partners had offered 387p per share to the group.
Soon after, Brookfield offered 400p a share, a price that Network’s directors eventually accepted. This price represents a 64 per cent premium to the group’s share price before acquisition speculation began.
Brookfield plans to combine the business with Magnati, the former payments unit of First Abu Dhabi Bank in which it bought a majority stake last year.
The network counts more than 150,000 merchants and 200 financial institutions among its customers across the Middle East and Africa. The Network website said the company has more than 50 percent market share in the United Arab Emirates and Jordan.
The announcement marks the second multi-billion pound acquisition of a London-listed company in the past week, signaling private equity’s renewed appetite for deals after a slow start to the year. Last week, EQT closed a deal to buy veterinary drug company Dechra in a £4.5bn deal.
The value of deals completed by the global private equity industry fell 43 percent during the first five months of 2023 compared to last year, according to data from Bain.
Difficulties with financing deals, ongoing geopolitical instability, and the transatlantic banking crisis in March all weighed on investor sentiment.
If the deal goes through, it would see the network back in the hands of acquisition companies once again. The company was previously backed by General Atlantic and Warburg Pincus, which took the business public on the London Stock Exchange in 2019.
Since then, the company has struggled to raise revenue and attract investor support, as its share price has fallen below its initial public offering price.
Brookfield’s bid is backed by a consortium of other investors including FAB, which could help the deal gain the necessary regulatory approvals.
“First Abu Dhabi Bank’s continued interest in Magnati is closely related to obtaining political support for the deal. FAB Chairman Sheikh Tahnoon may use influence to advance Brookfield’s bid,” T.D. Cowan wrote in an analyst note.
Brookfield has managed more than $825 billion and invested in the Middle East since 1997. The company owns assets including Canary Wharf in London and a stake in the Abu Dhabi National Oil Company’s natural gas pipeline.