Paysafe Group will list on the New York Stock Exchange following an agreement with Foley Trasimene Acquisition Corp, in a transaction which values the Isle of Man-based business at $US9 billion (£GB6.75 billion).
Foley Trasimene Acquisition Corp is a special-purpose acquisition company (SPAC) which is purchasing Paysafe from its current owners, the large private equity firms, CVC and Blackstone. At the conclusion of the transaction, Paysafe will be traded on the New York Stock Exchange.
Paysafe was previously a publicly traded company on the London Stock Exchange until CVC and Blackstone took the company private in 2017 for approximately £GB3 billion. SPACs are a mechanism to publicly list a company on a public stock exchange, but without “the pain and embarrassment of a traditional initial public offering.”
Matt Levine, an outstanding writer for Bloomberg, describes SPACs:
A SPAC, or blank-check company, is an empty shell that raises money from investors in a public offering and uses that money to find a (usually private) target company and merge with that target; the merger results in the target raising money (the money in the SPAC) and becoming public. The SPAC typically pays investment banks a fee of 5.5% of the money it raises, which is effectively passed on to the company that it takes public. It might also pay more investment banking fees for the merger with that company. It typically gives its sponsor—the famous investor or operator who runs the SPAC and finds a target company to take public—20% of its stock virtually for free, which, again, is passed on to that target company.
SPACs Aren’t Cheaper Than IPOs Yet
Paysafe operates a number of consumer-facing brands including Neteller and Skrill, in addition to providing merchant services. It is especially high profile in the online gambling industry, where consumers have traditionally found it a useful tool to circumvent anti-gambling restrictions of other banks and regulators.
