This article is part of Wellesley Hills Financial’s Market Movements series, found in our weekly newsletter.
As of March 31, 2021, Paysafe is officially a publicly traded company yet again. After completing a merger with Foley Trasimene Acquisition Corp II (A SPAC founded by billionaire deal-making legend Bill Foley) on March 30, the online payment service provider was listed on the New York Stock Exchange. This transaction has been highly anticipated since its announcement on December 7, 2020.
In the midst of all-time highs and a frothing SPAC market, the risk of overpaying for an asset has scarcely been higher; however, Mr. Foley has managed to identify a premium asset that is favorably positioned for the post-covid economy. Paysafe has notable operations in high-growth sectors such as iGaming & iGambling, digital wallets, and eCommerce integration. With over three-fourths of the Company’s revenue mix coming from online services, drawbacks to the economy’s reopening plan can do little but bolster the firm’s prospects.
Bill Foley has a rich track record of making his investors… well, rich. Mr. Foley sits on the board of directors for publicly traded companies such as Fidelity National Financial, Black Knight, and Dun & Bradstreet to name a few (not to mention his time with FIS, during which he doubled the company’s Market Cap).
Since the acquisition announcement on December 7, 2020, the stock price of the acquiring SPAC has increased by 31%, signifying that the transaction’s implied enterprise value of $9.0 billion was a steal. Giving consideration to valuation multiples afforded to industry leaders in some of the spaces Paysafe operates, Paysafe’s valuation may have room to appreciate. While the market still appears to be valuing Paysafe in a range most comparable to traditional payments companies, as online gaming and gambling continue to gain steam alongside the use of crypto currencies, investors may see Paysafe’s valuation climb further still.
