Tower Capital buys payments unit from Singapore's DBS
Tower Capital Asia has completed the fourth investment from its debut Southeast Asia fund – taking deployment past 60% - with the acquisition of a majority stake in payment solutions provider AXS from DBS Bank.
The private equity firm will take a 77.8% interest with DBS retaining 9.9%, according to a statement released by the bank. The new ownership structure will support business growth, including the expansion of ASX’s offering within Southeast Asia.
ASX was established in 2000 by hospitality and property group LKN-Primefield (now HLGE) and Network for Electronic Transfer (NETS Group), a payment services group owned by DBS, OCBC Bank, and UOB intended to accelerate the transition to a cashless society. It soon became Singapore’s leading electronic service delivery network (ESDN), providing e-services to private and government organisations.
AXS became a DBS subsidiary in 2006. It now provides more than 1m users access to over 600 payment services through a network of 660 self-service kiosks as well as through web-based and mobile apps.
Tower Capital’s value creation plans include transforming AXS into a regional cloud-based payment solutions provider, investing in technology to expand services and provide a more seamless user experience to merchants and consumers, and strengthening existing business operations, according to a separate statement.
It has recruited Jeffrey Goh, a co-founder of AXS and more recently CEO of NETS Group, to lead these efforts. He will join once the deal receives regulatory clearance and closes.
“A frontrunner in the digital payments industry, AXS pioneered multi-channel cashless payments in Singapore. The recent explosion in digital payments globally is providing a formidable tailwind for AXS, an established player, to seek growth via new business segments and markets,” added Danny Koh, CEO of Tower Capital.
The private equity firm was established in 2016 and worked on a deal-by-deal basis prior to raising its debut blind pool fund. The vehicle closed on USD 379m last year, with about 10 LPs contributing USD 324m in primary commitments and USD 55m in co-investment commitments. Total assets under management – across all investment vehicles – now stand at USD 500m.
Tower Capital typically invests in category leaders, preferably longstanding, hard-to-access companies with enterprise valuations of up to USD 350m. The Fund I portfolio already features education players I Can Read Asia and Indigo Education, and corporate services provider Boardroom.
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