Palamon Capital Partners, a pan-European growth investor, and Corsair, a private equity company targeting services, software, and payments investments in the financial services market, announced that funds managed by Blackstone Tactical Opportunities have agreed to “make a £140 million strategic investment” in Currencies Direct, a global provider of digital foreign exchange (FX) and international payment services to private clients and SMEs.
The investment will be “made in partnership with Currencies Direct’s management team, led by Keith Hatton, and Palamon and Corsair, which will retain their majority co-controlling stake in the company.” Blackstone’s investment will be “used to accelerate the company’s growth ambitions through further acquisitions.”
Currencies Direct is a digital FX and international payment platform “with £105 million in revenues and £43 million of EBITDA for the last twelve months ending January 2022.” The firm “focuses on high-value use cases and segments of the FX market, as well as SMEs.”
Currencies Direct combines a full-stack, fully-digital product offering for both consumers and businesses with quality customer service.
Since being acquired by Palamon and Corsair in 2015, the firm has delivered over 20% CAGR profit growth, “with EBITDA increasing from £13 million to £43 million, and has successfully executed three highly accretive add-on acquisitions, leveraging its scalable, state-of-the-art technology platform and infrastructure.”
In connection with its investment, Blackstone will “join the Currencies Direct Board of Directors.” Palamon and Corsair will “retain their majority co-controlling stake in the Company and will partner with Blackstone to accelerate Currencies Direct’s organic growth ambitions and target M&A opportunities across B2B, B2B2C and B2C platforms globally.”
Blackstone’s investment “concludes a series of successful dividend recapitalizations over the last 12 months resulting from the Company’s continued strong performance.”
In January 2022, the firm “completed a £235 million senior refinancing with Pemberton Asset Management, which followed a March 2021 £165 million refinancing.”
Keith Hatton, CEO of Currencies Direct, said:
“We are pleased to welcome Blackstone as a strategic investor alongside our long-term partners Palamon and Corsair. We are confident Blackstone’s expansive resources and expertise will help fuel our growth as we build on our significant momentum. Together with Palamon and Corsair, we have built a successful, sustainable, and innovative business with the knowledge, technology, and global footprint required to deliver best-in-class digital FX and international payment services.”
Qasim Abbas, Senior MD at Blackstone, remarked:
“We are delighted to invest in Currencies Direct, a leader in FX payments with an impressive track record of strong, continuous growth and a cutting-edge, scalable technology platform that can be leveraged to integrate and capitalise on the significant consolidation opportunities in the market. We look forward to working with the Company in partnership with Palamon and Corsair to find attractive M&A targets that can promote the expansion of Currencies Direct’s platform and further enhance its solutions for customers.”
Ali Rahmatollahi, Partner at Palamon, added:
“Currencies Direct has more than tripled EBITDA during our ownership to become one of the undisputed and most successful leaders in digital international payments in its core verticals. We have returned substantial capital back to our investors through this investment and are excited to be able to maintain significant exposure to the next phase of its development. We have step-change projects underway, the market opportunity is massive, and we continue to see an open runway for growth acceleration, both organically and through M&A. As such, we are delighted to partner with Blackstone to continue supporting the Company with added firepower to execute on those expansion opportunities.”
For more details on this update, check here.