London-based digital foreign exchange Currencies Direct announces £140m investment from Blackstone

Palamon Capital Partners (Palamon), a pan-European growth investor, and Corsair, a private equity firm targeting services, software, and payments investments in the financial services market, announced that funds managed by Blackstone have agreed to make a £140 million strategic investment in Currencies Direct, a global provider of digital foreign exchange (FX) and international payment services to private clients and small and medium sized enterprises (SMEs).

The investment will be made in partnership with Currencies Direct’s management team, led by Keith Hatton, and Palamon and Corsair (“the Sponsors”), which will retain their majority co-controlling stake in the Company. Blackstone’s strategic investment will be used to accelerate the Company’s growth ambitions through further acquisitions.

Keith Hatton, CEO, Currencies Direct: “We are pleased to welcome Blackstone as a strategic investor alongside our long-term partners Palamon and Corsair. We are confident Blackstone’s expansive resources and expertise will help fuel our growth as we build on our significant momentum. Together with Palamon and Corsair, we have built a successful, sustainable, and innovative business with the knowledge, technology, and global footprint required to deliver best-in-class digital FX and international payment services.”

Currencies Direct is one of the largest digital FX and international payment platforms globally with £105 million in revenues and £43 million of EBITDA for the last 12 months ending January 2022. The Company focuses on high-value use cases and segments of the FX market, as well as SMEs. Currencies Direct combines a full-stack, fully-digital product offering for both consumers and businesses with award-winning customer service. Since being acquired by Palamon and Corsair in 2015, the Company has delivered more than 20% CAGR profit growth, with EBITDA increasing from £13 million to £43 million, and has successfully executed three highly accretive add-on acquisitions, leveraging its scalable, state-of-the-art technology platform and infrastructure.

Qasim Abbas, Senior Managing Director, Blackstone: “We are delighted to invest in Currencies Direct, a leader in FX payments with an impressive track record of strong, continuous growth and a cutting-edge, scalable technology platform that can be leveraged to integrate and capitalise on the significant consolidation opportunities in the market. We look forward to working with the Company in partnership with Palamon and Corsair to find attractive M&A targets that can promote the expansion of Currencies Direct’s platform and further enhance its solutions for customers.”

In connection with its investment, Blackstone will join the Currencies Direct Board of Directors. Palamon and Corsair will retain their majority co-controlling stake in the Company and will partner with Blackstone to accelerate Currencies Direct’s organic growth ambitions and target M&A opportunities across B2B, B2B2C and B2C platforms globally.

Ali Rahmatollahi, Partner, Palamon: “Currencies Direct has more than tripled EBITDA during our ownership to become one of the undisputed and most successful leaders in digital international payments in its core verticals. We have returned substantial capital back to our investors through this investment and are excited to be able to maintain significant exposure to the next phase of its development. We have step-change projects underway, the market opportunity is massive, and we continue to see an open runway for growth acceleration, both organically and through M&A. As such, we are delighted to partner with Blackstone to continue supporting the Company with added firepower to execute on those expansion opportunities.”

Blackstone’s investment concludes a series of successful dividend recapitalisations over the last 12 months resulting from the Company’s continued strong performance. In January 2022, the Company completed a £235 million senior refinancing with Pemberton Asset Management, which followed a March 2021 £165 million refinancing. 

Derrick Estes and Raja Hadji-Touma, Partners, Corsair: “We continue to believe there is tremendous opportunity for innovation and expansion in the FX and payment processing industry globally and are highly confident in Currencies Direct’s ability to extend its position by leveraging its strong customer value proposition, differentiated client acquisition strategy, and scalable technology platform. After many years of strong growth and execution under Keith’s leadership, we are excited to welcome Blackstone as a partner to enhance Currencies Direct’s growth plans by identifying attractive, value-accretive acquisition targets, especially in B2B and B2B2C.”

The transaction is expected to close by the end of the first quarter of 2022. William Blair acted as financial advisor and Slaughter & May acted as legal advisor to Currencies Direct, Palamon and Corsair. FT Partners and EY LLP acted as financial advisor and Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone.

www.blackstone.com
www.currenciesdirect.com