Written By CVC Capital Partners and Francisco Partners have announced their plans to acquire Network International, a UAE-based digital payments company, for £2.1 billion. The acquisition marks a significant move in the global digital payments sector, and could potentially lead to the creation of a new global leader in digital payments.
Network International is a leading provider of digital payment solutions in the Middle East and Africa, with operations in over 50 countries. The company provides payment solutions to banks, governments, and merchants, and has seen significant growth in recent years, driven by the increasing adoption of digital payments in the region.
The acquisition by CVC and Francisco comes at a time when the digital payments sector is experiencing significant growth globally. According to a report by McKinsey, digital payments are expected to reach $6.7 trillion in value by 2023, with the Asia-Pacific region being the largest market.
CVC and Francisco’s acquisition of Network International could potentially lead to the creation of a new global leader in digital payments. CVC and Francisco are both experienced investors in the technology and payments sectors, and could bring significant expertise and resources to Network International. The two firms have a track record of successful investments in the sector, with Francisco having previously invested in payments technology firms such as Bill.com and Eze Software, while CVC has invested in payments companies such as Paysafe and Skrill.
The acquisition of Network International by CVC and Francisco could also have wider implications for the digital payments industry in the Middle East and Africa. The region has seen significant growth in digital payments in recent years, driven by the increasing adoption of smartphones and e-commerce. However, there is still significant room for growth, with cash payments remaining prevalent in many countries in the region.
The involvement of private equity firms like CVC and Francisco in the sector could help to drive further investment and innovation in digital payments in the region. However, there are also concerns about the impact of private equity ownership on Network International and its operations.
Private equity firms are known for their focus on cost-cutting and efficiency, which could lead to job losses or changes to Network International’s operations. There are also concerns about the impact of private equity ownership on the company’s culture and its ability to innovate and grow.
The acquisition of Network International by CVC and Francisco is also significant for the broader economic landscape in the Middle East and Africa. The region has seen significant interest from global investors in recent years, with the development of technology hubs and the growth of the digital economy. The involvement of private equity firms like CVC and Francisco in Network International could help to further fuel this growth and increase investment in the region.
However, there are also risks associated with the deal, particularly given the uncertain economic climate caused by the COVID-19 pandemic. The pandemic has had a significant impact on the global economy, and there are concerns about the long-term impact on the digital payments sector. The involvement of private equity firms could help to mitigate some of these risks, but there are no guarantees of success.
In conclusion, the acquisition of Network International by CVC and Francisco is a significant move in the global digital payments sector. The involvement of private equity firms in the sector could help to drive further investment and innovation, but there are also risks associated with the deal. It will be interesting to see how Network International’s shareholders and regulators respond to the acquisition, and what impact it has on the company and the wider digital payments industry in the Middle East and Africa.
