BGH, Sixth Street agree $933m buyout of New Zealand's PushPay

The company appointed a financial advisor in April after being receiving unsolicited, non-binding expressions of interest from third parties. A month later, PushPay disclosed the existence of a cooperation and process agreement with BGH and Sixth Street, signed with a view to a potential acquisition, although it added that several sets of negotiations were still at an early stage.

BGH and Sixth Street have won board approval for a scheme implementation agreement that would see them acquire all outstanding shares for NZD 1.34 apiece, according to a filing. This represents a 30.1% premium to the closing price on April 22 – when pursuit of the company became public – and a multiple of 16.7x, based on projected underlying EBITDA for the 2023 financial year.

PushPay’s stock opened at NZD 1.26 on October 31, having closed at NZD 1.19 on October 27 and then been suspended from trading for a day. The company has a market capitalisation of approximately NZD 1.36bn. The scheme must be approved by shareholders for it to proceed.

BGH and Sixth Street – the former was established by the former Asia managing partner of TPG Capital, the latter is a credit and special situations spinout from TPG Capital – already own 20.34% of PushPay.

BGH often accumulates equity positions in listed companies prior to making buyout bids. Earlier this year, it acquired fertility care business Virtus Health following a hotly contested pursuit, which saw the company at one point sign a binding implementation deed with a rival group. BGH’s 19.99% position in Virtus enabled it to block certain competing proposals and it eventually won out.

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. Most of the company’s revenue comes from the US.

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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• Topics
• Australasia
• Buyouts
• Technology
• Financials
• BGH Capital
• New Zealand