New Zealand's Pushpay confirms PE approaches
Pushpay, a New Zealand and Australia-listed payments business specialising in donor management, confirmed it had been approached by prospective buyers but played down the significance of an agreement with BGH Capital and Sixth Street Partners.
The company, which was founded in New Zealand but now generates most of its revenue from the US, appointed a financial advisor in April after receiving multiple unsolicited, non-binding expressions of interest from third parties. On May 24, it disclosed the existence of a cooperation and process agreement with BGH and Sixth Street, signed with a view to a potential acquisition.
Pushpay said in a filing later the same day that there is no agreement with any partner to implement a transaction. It added that negotiations, involving multiple parties, still at an early stage. The company’s stock jumped 13% on May 24 to close at NZD 1.40. It hit NZD 1.45 by the end of trading on May 25, giving the company a market capitalisation of NZD 1.6bn (USD 1bn).
BGH often accumulates equity positions in listed companies prior to formally proposing a scheme of arrangement. The private equity firm now owns 3.1% of Pushpay, while Sixth Street – a credit and special situations platform that spun out from TPG Capital – has 20.3%. BGH was established by the former Asia managing partner of TPG.
Founded in 2011, Pushpay offers a suite of donor tools, finance tools, a community app, and a church management system (ChMS). It primarily works with religious, educational, and non-profit organisations, simplifying community engagement, the tracking of online donations, and administrative functions.
As of March 2022, the company had 14,500 customers and had processed USD 7.6bn in online donations over the prior 12 months, up from USD 6.9bn in 2021. Operating revenue rose from USD 179.1m to USD 202.8m, of which 67% came from transaction processing and 30% came from subscriptions. Net profit increased from USD 31.2m to USD 33.4m.
The company estimates that the total addressable market in the US faith sector, including donor and church management platforms, is up to USD 2.5bn. The Catholic church segment, which Pushpay started targeting last year, accounts for USD 600m to USD 700m.
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