TBC Bank (TBC) announces that it has signed a Sales and Purchase Agreement (SPA) to acquire the remaining minority share of 49% from the founding shareholders in LLC Inspired, the TBC's payments subsidiary operating under the Payme brand (Payme) in Uzbekistan. Following the acquisition of the minority share of Payme, TBC has become the 100% shareholder of Payme, the company said in a statement.
Payme is a leading digital payments provider in Uzbekistan for individuals and small businesses. It offers high-quality payment solutions via its multi-vertical app including P2P transfers, bill payments, QR payments, e-commerce, cross-border money remittances, loan repayments, personal financial manager (PFM) services and government services.
The transaction was conducted within the scope of the shareholder agreement entered by both parties during the TBC's initial acquisition of 51% in Payme in April 2019. The exercise price of the option was based on a set of pre-determined parameters defined at the time of the original agreement, including Payme's revenue, EBIT and the number of active customers.
Since then, Payme has grown significantly. The total revenue and profit before tax for the year to December 2022 amounted to USD 17.5 million and USD 11.4 million, respectively, compared to USD 1.6 million and USD 0.8 million, respectively, in 2018. The number of monthly active customers was 3.1 million at the end of March 2023, compared to 1.3 million users in April 2019.
The consideration to be paid for the 49% stake is USD 55.7 million and will be satisfied in cash within 10 banking days from the date of the completion, implying a total valuation of USD 113.6 million for Payme. Based on the first quarter 2023 annualized net profit, this valuation implies a 2023 P/E multiple of 6.5x.
Vakhtang Butskhrikidze, Chief Executive Officer, commented:
We are delighted to be completing the minority buyout of Payme, giving us 100% ownership of this dynamic payments platform. This acquisition is in line with our previously outlined expansion strategy in Uzbekistan to create a leading fintech ecosystem. It will allow us to capture the strong synergy potential between the payments business and our digital bank, TBC UZ, by leveraging a large user base and a diverse product range. I strongly believe that our joint efforts in these two businesses will accelerate the achievement of our mid-term targets for our Uzbek operations: return of equity of at least 30%, monthly active users of 5 million, and 10-15% share of the TBC's net income.