Brookfield strikes £2.2bn deal for London-listed payment processor

Canadian investment group Brookfield Asset Management has agreed to buy Middle Eastern credit card processor Network International in a £2.2bn deal, the latest high-profile take-private of a London-listed company.

Network first emerged as a takeover candidate for private equity firms in April when it announced that a consortium including CVC Capital Partners and US firm Francisco Partners offered 387p a share for the group.

Shortly after, Brookfield bid 400p a share, the price which Network’s directors eventually accepted. That price marks a 64 per cent premium to the group’s share price before speculation of a takeover began.

Brookfield plans to combine the business with Magnati, the former First Abu Dhabi Bank payments unit in which it bought a majority stake last year.

Network counts more than 150,000 merchants and 200 financial institutions among its customers across the Middle East and Africa. The company has a more than 50 per cent market share in the United Arab Emirates and Jordan, Network’s website said.

The announcement marks the second multibillion-pound acquisition delisting of a London-listed company in the past week, signalling private equity’s renewed appetite for dealmaking after a slow start to the year.  Last week, EQT struck a deal to buy veterinary drugmaker Dechra in a £4.5bn deal.

The value of deals completed by the global private equity industry was down 43 per cent through the first five months of 2023 from a year ago, according to data from Bain.

Difficulty in financing deals, ongoing geopolitical instability and a transatlantic banking crisis in March have all weighed on investor sentiment.

If the deal completes, it will see Network return into the hands of buyout firms 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 grow revenue and attract investor support, with its share price languishing below its initial public offering price.

Brookfield’s bid is backed by a consortium of other investors including FAB, which may help the deal gain the necessary regulatory approvals.

“The FAB’s continued interest in Magnati is very relevant with respect to garnering political support for the transaction. The FAB Chairman Sheikh Tahnoon may use influence to push the Brookfield bid through,” TD Cowan wrote in an analyst note.

Brookfield manages more than $825bn and has been investing in the Middle East since 1997. The company owns assets including London’s Canary Wharf and a stake in the Abu Dhabi National Oil Company’s natural gas pipeline.