US payments company Syncapay buys Wirecard North America

Wirecard North America had put itself up for sale in June after its troubled German parent firm filed for insolvency

FILE PHOTO: The headquarters of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions is seen in Aschheim near Munich, Germany, September 22, 2020. REUTERS/Michael Dalder/File Photo
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The US-based payments company Syncapay has bought the North American unit of the troubled FinTech firm Wirecard, the insolvency administrator of the German company said.

Wirecard North America had put itself up for sale in June after its parent firm filed for insolvency. To attract potential buyers, it claimed that it was an autonomous legal and business entity.

“We are very happy with this solution for Wirecard North America,” said the insolvency administrator Dr Michael Jaffe.

“With this transaction we have achieved an important milestone in our sales efforts in the best interest of the creditors of Wirecard,” he added, without disclosing the purchasing price.

The transaction is subject to approval by regulatory authorities.

This is the second major acquisition of Syncapay, a holding company focused on high potential payment solutions, after the purchase of daVinci Payments in 2017.

The deal is backed by private investment management firm Centerbridge Partners and existing Syncapay’s shareholders including Bain Capital Ventures, Silversmith Capital Partners, MissionOG, and Nyca Partners. Centerbridge is making a majority equity investment in Syncapay.

Wirecard North America is one of the market leaders in the US for the issuing of compensation, disbursement, consumer incentive and refund cards.

On April 27, accountancy firm KPMG published the findings on an independent audit commissioned by the Munich-headquartered Wirecard in the hope that it would quash much of the negative publicity that had surrounded the company over the past 18 months.

Instead, KPMG's verdict – that it couldn’t verify whether vast amounts of the company’s revenue and earnings were genuine – sent Wirecard into a downward spiral that ended with it entering into insolvency on June 25 after declaring a €1.9 billion (Dh8.2bn) hole in its accounts, and the arrest of several of key executives on suspicion of accountancy fraud.

The company had previously been lauded as a European FinTech star and was the newest member of the Dax 30 – the index of the biggest German companies listed on the Frankfurt Stock Exchange – with its valuation peaking at €24bn in August 2018.