Duke Street sells Payzone Ireland to Carlyle

European mid-market firm Duke Street has sold its controlling stake in Payzone Ireland to The Carlyle Group, according to a statement.

Financial details of the transaction were undisclosed, but according to a source with knowledge of the deal, the enterprise value was between €30 million and €40 million.

Payzone Ireland is one of the largest consumer payments network in Ireland with more than 7,000 retail agents processing a variety of electronic transactions services, including mobile phone top ups and debit and credit card transactions. Other transactions include M50 motorway toll payments, leap travel cards, local property tax payments, parking fees, pre-paid utility and parcel collection services. Based in Sandyford, Dublin the company employs more than 70 people in Ireland.

Duke Street became a majority shareholder in Payzone Group, the pan-European parent of the Irish business, in 2010. It took the AIM-listed company private and restructured the business, which was then heavily indebted.

In 2013, Duke Street agreed to sell Payzone unit Cashzone, an operator of ATMs in the UK and Germany, to global payment services provider Cardtronics, which netted the firm a 1.3x return. Payzone’s Swedish and Greek businesses were subsequently exited. Duke Street still owns Payzone UK and Payzone Romania as the two remaining businesses in the original Payzone Group. So far, Duke Street has netted a return of more than 2x on the partial exits relating to Payzone, according to a source close to the matter.

“We are proud to have worked with Payzone's talented management team through the journey of restructuring the group, growing and selling its Cashzone ATM operations, strengthening the market position of the remaining Payzone businesses and generating excellent returns for Duke Street’s investors,” Charlie Troup, a partner at Duke Street, said.

Duke Street made the initial investment from its Duke Street Capital VI vehicle, which raised €963 million in 2006 against an €850 million target. That portfolio consists of eight businesses, including restaurant chain Wagamama and dental business Oasis, in which the firm still owns a 12 percent minority stake following a partial sale to Bridgepoint.

Carlyle made the investment using Carlyle Cardinal Ireland (CCI), an investment vehicle that was launched by The Carlyle Group and Cardinal Capital Group and closed on €292 million in July last year.

The fund invests in small and medium sized enterprises in Ireland. It focuses on investment opportunities in the TMT, healthcare, clean tech, consumer brands, specialist manufacturing and financial services sectors. The fund made its first investment in January 2014 when it took a ‘significant majority’ stake in Kildare-based premium chocolate manufacturer Lily O’Brien’s. Last November the fund also invested in General Secure Logistics Services, an Irish provider of cash management and cash logistics services.