The transaction with AllScore Payment Services enables the Germany-based Wirecard’s entry into China. Wirecard has signed a deal to acquire Chinese payments technology firm AllScore Payment Services in a deal worth up to €109.3m.
The German fintech company, which will first acquire a stake of 80%, has an option to acquire the remaining 20% in the Chinese company after two years. Currently, AllScore Payment Services is controlled in its majority by its founder and CEO Yao Lin and Shanghai Aiwu Investment Management.
The acquisition of a controlling stake in the Chinese payments firm will mark the foray of Wirecard into China, thereby expanding its global technology platform through cross-border licenses. Wirecard CEO Markus Braun said: “The Chinese market represents a tremendous opportunity for Wirecard. The licenses are a perfect match to the global platform strategy of Wirecard.”
Established in 2007, AllScore Payment Services is a local payment service provider, which employs a team of over 120 people. The company’s license portfolio is expected to give Wirecard the scope to offer internationally-oriented Chinese merchants local acquiring services, cross-border acquiring including settlement in their local currency and also digital value-added services.
Apart from that, Wirecard’s international merchants will get access to Chinese consumers and will be able to accept widely-used digital mobile payments methods and receive settlements in their respective local currency.
AllScore Payment Services’ license portfolio is also said to give Wirecard the capability to issue payment cards to consumers and firms in China.
Financial terms of the deal between Wirecard and AllScore Payment Services
As part of the deal, Wirecard will invest up to €72.4m in the Chinese company until the closing of the transaction. AllScore Payment Services will be entitled to receive an earn-out payment of up to €16.7m, subject to EBITDA targets in the fiscal year 2020.
The remaining 20% in the Chinese company can be acquired by Wirecard for up to €20.2m, subject to post-closing EBITDA targets.
AllScore Payment Service CEO, chairman and founder Yao Lin said: “We welcome Wirecard to China and are proud that they have selected us to enter the market, joining in on the efforts of the Chinese Government to open the financial sector and improve the regulatory environment for market access to foreign investors.
“Wirecard’s demonstrated history in expanding a global, digital business and their professional approach to execution, combined with our local knowledge and licenses make us an ideal combination to serve Chinese merchants, as well as international clients doing business in China.”
The closing of the deal will be subject to customary and regulatory closing conditions.