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Point International

Investment summary

Fund: Fund V
Investment theme: Growth acceleration, Buy-and-build and Strategic repositioning.
Investment date: December 2004
Exit date: November 2011

Business description

Point was founded in 1987 and is Europe's leading provider of services, proprietary software and products within the electronic payment solutions market.

Point serves every type of business from small shops to multi-national retail chains that require multi-channel payment capabilities, as well as hotels, restaurants, business-to-business customers etc.

At the time of the divestment, Point installations handled 10 million transactions per day, and the Point Group provided service to approximately 630,000 payment terminals. Point had more than 800 employees and a local presence in Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Lithuania, Norway, Sweden and the UK.

Background

When Nordic Capital acquired Point, the company had a strong position on an attractive market. At that time, the number of financial transactions grew by 20 percent per annum on a global basis. The owners of Point had developed an outstanding technological platform but lacked the funds and commercial relationships to pursue larger scale growth.

In December 2004, Nordic Capital Fund V acquired Point International and EDT, which were subsequently merged. Nordic Capital acquired 90 percent of Point International and the founders and management retained the remaining 10 percent.  

Investment rationale

Point operated on an attractive market with great growth potential based on a continuously growing share of electronic payment methods as well as a higher demand on security in electronic payments.

During the strategic assessment of Point Nordic Capital established a growth strategy that would consist of a combination of migrating the customer base over to the new subscription based model, pursuing market share gain as well as entering into selected European countries. Apart from increasing revenues, a subscription based model dramatically increased recurring revenues while having very modest churn levels.

Value added

Since the acquisition in 2004, Point grew into becoming Europe's leading provider of electronic payment solutions serving over 475,000 individual merchant contracts across Europe.

The outstanding growth of Point was driven by a defined strategy for market leadership through investments:

  • Investing  in  the  Point  router  Network  in  order  to  allow  merchants  to  enjoy "Payment as a Service", which has become a success due to increasing demands from the regulatory side as well as increasing functional requirements from merchants on multi channel solutions and added value services.
  • Changing the business model to a recurring revenue model based on subscriptions, enabled by the investments in the Point Network.
  • Leveraging Point's strong technological know-how to strengthen its position within the Nordic region and expanding into selected European countries.
  • Developing industry and country specific applications in order to increase differentiation.

Under Nordic Capital's ownership Point' sales grew close to five times higher than at the time of acquisition with EBITDA surpassing the size of the initial investment.

Exit

In November 2011, Point International was sold to the global leader in secure electronic payment solutions, VeriFone Systems. Under VeriFone's ownership Point gains access to all the capabilities of a global market leader, poising it for further growth and development.

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