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Owners of Swiss payment firm Global Blue test appetite for US$2.3b sale: sources

[LONDON] The owners of Swiss firm Global Blue are sounding out prospective bidders for their shopping tax-refund payment firm Global Blue, a deal that could value it at close to 2 billion euros (S$3.06 billion), sources familiar with the situation said on Friday.

Silver Lake and Partners Group, which share control of a business known for its tax-free shopping network, have signed non-disclosure agreements (NDA) with a series of interested parties, which include some European buyout funds, one of the sources said, cautioning that no deal was certain.

Silver Lake and Partners Group declined to comment.

Based in Eysins, near Geneva, Global Blue provides VAT sales tax refunds, currency conversion and other services to more than 100,000 customers a day.

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It serves tourists who buy luxury goods while abroad and has been backed by private equity investors for the past nine years, with Silver Lake and Partners Group being the latest funds to come onboard in 2012.

Global Blue's tax free shopping network, which consists of 270,000 partners among retailers, brands and hotels in 43 countries, allows for savings of up to 19 per cent on goods purchased abroad, according to its website.

The business, which is chaired by Silver Lake managing director Christian Lucas, has drawn interest from several bidders but a sale process has yet to start, the sources said.

Another source said the company has been on the market for weeks, if not months, as its owners are reviewing options to exit the business and maximise value.

Global Blue posted 115 million euros in earnings before interest, taxes, depreciation and amortization (EBITDA) in the year to end March 2015, representing a 13 percent drop on the previous year, according to a Moody's report, which mentioned restructuring charges and costs linked to digital investments.

The report, published in September, added that the company's underlying earnings growth remained solid, with turnover growth of more than seven percent in the 12 months to March 2015 and gross profit up over four per cent during the same period.

Global Blue is heavily reliant on Chinese, Middle Eastern and Russian tourists who use its network to purchase goods tax free, and as such could appeal to Asian buyers seeking access to European markets, one of the sources said.

Silver Lake and Partners Group, which bought the business four years ago for about 1 billion euros and were looking to profit from a digitization push, are now grappling with the weakening of Asian and Russian markets which have caused a slowdown in consumer spending.

Some private equity funds may find the business too dependent on tax refund legislation, making it vulnerable to possible losses in the event of new tax rules, said another source close to one of the potential bidders. "Some funds and lenders won't take the risk. That said, it's never happened yet and the concept is well recognized," he said.

Buyout funds recently backed another tax free shopping firm in Ireland, Fintrax Group, which was sold in November by London-based Exponent Private Equity to French investment firm Eurazeo in a deal which valued the business at 550 million euros.

REUTERS

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