Growth markets investor Actis had made a significant investment in GHL Systems, a Southeast Asian payments company headquartered in Kuala Lumpur and listed on Bursa Malaysia, following an RM290.24 million ($65.5 million) investment.
Actis becomes the largest shareholder in GHL, having acquired an initial 44.4 per cent stake from private equity firm Creador and Simon Loh, Executive Vice Chairman of GHL, who will also retain a 19.1 per cent stake in GHL.
The Kuala Lumpur headquartered payments company provides integrated end-to-end payment services and solutions encompassing physical, digital and mobile payments on a sale, rental or transactional basis. The acquisition, made via Actis Stark (Mauritius) Ltd, has triggered a mandatory takeover offer for the remaining shares in GHL.
Actis intends to make an offer to purchase the remaining shares and subsequently delist GHL once it’s stake exceeds 75 per cent. Actis is acquiring 290.24 million shares of RM1 each in GHL from Tobikiri Capital Ltd, which is Loh’s investment vehicle, and Cycas, a unit of private equity (PE) fund Creador Sdn Bhd.
The deal will see Creador exit with a return of 2.8x and an IRR of 40 per cent in Malaysian ringgit terms or a 2.1x and an IRR of 27 percent in US dollar terms. Creador acquired a stake in GHL in November 2013 for $19.7 million through its second buyout vehicle Creador II, which raised $330 million in October 2014 and is fully invested across 13 deals. Following the firm’s exit from GHL, the firm would have realised 14 percent of Creador II.
During Creador’s investment period, GHL’s revenue increased from RM165 million in 2014 to RM 246 million in 2016, while the company’s net income grew almost three-fold to RM18 million during the same period. That period also say GHL acquiring e-pay Asia, an electronic top-up service provider for mobile phone users, in 2014 and launched merchant acquiring businesses in Malaysia and the Philippines.
Simon Loh, Executive Vice Chairman of GHL, commented: “I am very excited to welcome Actis as a partner, as they bring an impressive track record in the payments sector.Together, we are fully aligned in our ambition to become the leading end-to-end payment services enabler in ASEAN by deploying world- class payment infrastructure, technology and services.”
Actis has a growing portfolio of investments across Asia, Africa and Latin America and has raised over $12 billion since inception. It will work alongside Loh and remaining shareholders to support management to further scale and enhance GHL’s position as a leading regional payments business. Actis has also extended a mandatory take-over offer on the remaining GHL shares.
Ali Mazanderani, Actis’s Fintech lead, explained: “Investing in South East Asia and in GHL is a continuation of Actis’ strategy to be integral to and support the development buildout of landmark payments platforms across our markets. It follows on from our investments in Emerging Market Payments in Africa and the Middle East, PayCorp in Africa and DLP Payments in Latin America.”
Other than serving the traditional banking and financial sector, the company also serves major telecommunications companies, retailers and airlines in ASEAN. GHL manages more than 140,000 points of sale in ASEAN that enable credit card, debit card, prepaid contactless payment, loyalty, prepaid top-up and bill payment collection services. Its largest markets are Malaysia, the Philippines and Thailand.
Actis has extensive experience in growth markets payments, having invested in and helped build out leading payments platforms—including Emerging Markets Payments, PayCorp and DLP Payments—that have spanned more than 50 countries.
Hossam Abou Moussa, Partner at Actis, said, “Investing in market leading businesses in the sectors we understand is a core pillar of our growth markets investment strategy. We are extremely excited by the opportunity to partner with Simon and the management team and to bring what we have learned in other markets to help GHL to scale and to cement its position as a regional leader.”