In early August the announcement was made that KKR acquired a majority stake in Heidelpay, a German payments business headquartered in the beautiful city of Heidelberg. But wasn’t there something about Heidelpay before. Yes, only in January 2017 Heidelpay management sold a stake to private equity firm Anacap Financial Partners. Another change in ownership after only 2.5 years! Although some of the financials around the deals are not in the public domain, the Alternative Assets Network speaks of Anacap achieving an 80% internal rate of return on its investment. If true, that will make some investors very happy.
But looking more closely at Heidelpay it is staggering what transformation the company has gone through since early 2017. Back then, Heidelpay was a Payment Service Provider focussing on online payment acceptance in the DACH region. Just like many others. But with the financial backing of Anacap, Heidelpay has made at least 6 relevant acquisitions that provided geographical expansion, omnichannel extension and a move into APMs (Alternative Payment Methods). mPay24 increased Heidelpay’s footprint in Austria, the acquisitions of Avanti, Alpha-Cash and ec-plus offered debit card processing capabilities in the physical world, Startec enhanced Heidelpay’s omnichannel offering and with Universum Group, Heidelpay moved into pay-later / instalment payments with risk management and payment collection capabilities.
These add-on acquisitions truly turned Heidelpay from a mid-sized online PSP to an omnichannel provider of payment acceptance solutions in Germany and neighbouring markets. All of Heidelpay’s key metrics – processed volume, revenues, EBITDA – have increased by a factor of 8-10 over the last 2.5 years. The Heidelpay of today is unrecognisable from the Heidelpay in 2016/17.
Whilst The Economist recently quoted that “KKR is on a roll in Germany”, it will be interesting to see what KKR plans to do next concerning the transformation of Heidelpay.
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