Innova Capital backs Polish GTECH deal

The Warsaw-based private equity firm has taken a 36 per cent stake in Polish credit card services business PolCard.

Innova Capital, the Polish venture capital firm, has joined forces with US-based lottery systems company GTECH Holdings in a deal to acquire PolCard, a debit and credit card transaction services business based in Poland.

 

Innova and GTECH will pay $62m for the business, which includes $2m of debt, to travel services business Orbis and a consortium of Polish banks. GTECH will hold a 62.8 per cent equity stake in PolCard and 36.9 percent will be held by Innova. The Polish private equity firm, led by Steven Buckley, invested around $20m in the deal from its Innova '93 and Innova '98 funds.

 

As part of the transaction, GTECH and Innova Capital have made arrangements for Innova to sell its interest in the business within four to six years of the deal closing, although the price has yet to be arranged.

 

'PolCard represents a significant financial services strategic asset in Poland that Innova has been interested in acquiring for over 18 months,' said Steven Buckley. The Innova bidding team beat off competition from four other undisclosed bidders in the auction, which began last year.

 

Innova and GTECH said that Poland's entry into the European Union will provide ‘substantial growth’ in the merchant acquiring and processing market. At present, less than 17 per cent of bank card transactions in Poland are cashless transactions compared to 40 per cent in Western Europe.

 

The deal is the second major transaction to take place in the Polish market in recent weeks. Enterprise Investors, also based in Warsaw, recently announced that it was to exit its interest in Stomil Sanok, a Polish manufacturer of automotive rubber products, selling its 68 per cent stake in the business to management.