Helios consortium formally announces CAB Payments bid

(Sharecast News) - A consortium led by Helios Investment Partners formally announced its offer for CAB Payments on Monday, valuing the company at $297m on a fully-diluted basis, despite the company pushing back on approaches at the same price in February. According to the rule 2.7 announcemernt, Mara BidCo, a newly formed vehicle indirectly owned or controlled by Helios Investors V and Helios Fairfax Partners Corporation, together with Helios Investors III, would offer $1.15 in cash for each CAB Payments share.

The offer represented a 23% premium to the 30-day volume weighted average share price to 30 January and a 40% premium to the 90-day VWAP over the same period.

Helios Fund III, which has been invested in CAB Payments since 2016, currently owns or controls 114.6 million shares, representing about 45.11% of the issued share capital.

Including irrevocable undertakings and a letter of intent, the Helios Consortium owns, controls or has secured support in respect of approximately 133.9 million shares, equivalent to 52.7% of the firm's issued share capital.

In addition to the cash offer, eligible shareholders would be able to elect for a partial alternative comprising one unlisted non-voting ordinary share in BidCo for each CAB Payments share held, subject to an overall cap of 38.1 million shares, or around 15% of the issued share capital.

Any elections above that level would be scaled back pro rata, with the balance paid in cash.

The rollover shares would be unlisted, illiquid and subject to transfer restrictions, including a three-year lock-up.

According to the announcement, the consortium believed CAB Payments was facing significant strategic challenges amid rapid change in cross-border payments and foreign exchange markets.

It cited regulatory developments lowering barriers to entry, increased competition from well-capitalised and technologically advanced players, and the rapid adoption of stablecoin-based cross-border payment systems, which it said were "rapidly capturing market share".

Helios also pointed to deteriorating financial performance and market expectations since the company's IPO.

Consensus forecasts for 2024 adjusted EBITDA published after the 2023 results were £62m, compared with actual 2024 adjusted EBITDA of £31m, a 50% shortfall.

Current consensus forecasts for 2025 and 2026 adjusted EBITDA of £33m and £38m are around 56% below earlier expectations.

Adjusted earnings per share forecasts showed similar declines, the consortium said.

The consortium added that it believed CAB Payments had the potential to leverage its regulatory footprint and commercial network but that "this transformation in strategic delivery will be best achieved under the private ownership of the Helios Consortium, supported by the Helios Consortium's deep sector expertise and long track record in payments."

The offer would be financed through equity capital invested by Helios Fund V and Helios Fairfax Partners, with Helios Fund V drawing on committed capital from its limited partners and, if required, a debt facility from RMB.

Rothschild & Co, financial adviser to the Helios Consortium, confirmed that sufficient resources were available to satisfy the cash consideration in full.

The acquisition would be implemented by way of a takeover offer, subject to pre-conditions and conditions including a minimum acceptance threshold of 75% of the voting rights, although BidCo reserved the right to waive that in accordance with the Takeover Code.

If successful, CAB Payments' shares would be delisted from the London Stock Exchange and the company re-registered as a private limited company.

At 0900 GMT, shares in CAB Payments Holdings were up 2.14% at 86p.

Reporting by Josh White for Sharecast.com.