Change Financial agrees to buy Wirecard’s Australian, NZ businesses out of administration

ASX-listed fintech Change Financial has agreed to acquire Wirecard’s Australian and New Zealand businesses.

Wirecard’s Australian and NZ operations have been sold. (Photo by Christof STACHE / AFP)

ASX-listed fintech Change Financial has agreed to acquire Wirecard’s Australian and New Zealand businesses, avoiding a liquidation process and giving the buyer access to a broader set of customers.

Change Financial, which is US based, kicked off a capital raising on Friday to help fund the deal which it is expected to settle in October. The buyer agreed to acquire the entities which had been separately placed in administration.

The Australian foreshadowed that the local sale of Wirecard was in the final stages. It has implications for a string of banks and financial institutions that draw on Wirecard’s technology or products.

Globally, Wirecard started insolvency proceedings for a spate of its sprawling entities in June. The saga, which has led to the arrest of executives offshore, was largely due to alleged fraud and a missing €1.9bn ($3.1bn)

Change Financial — a banking platform and infrastructure group — said the Australia and NZ Wirecard transaction was sealed for a cash amount of $7.8m, which could be adjusted for working capital. Its presentation to investors said Wirecard’s technology was sold to more than 120 customers, and would help the buyer achieve broader geographic reach and annuity income.

The presentation also listed a number of potential deal risks including greater than expected historic Wirecard liabilities, and challenges linked to business integration.

The deal is subject to sign-off by NZ regulators and staff across the jurisdictions are being told it’s “business as usual”, with offers being extended to those being re-employed into a new entity.

McGrathNicol and BDO were appointed administrators of Wirecard NZ and Wirecard Australia respectively, and were running a separate process to the global proceedings.

Westpac has a small exposure to Wirecard, although not via lending, while Bendigo and Adelaide Bank runs the group’s products but on its own systems, and payments group Cuscal counts Wirecard as a third-party provider.

Industry superannuation fund-owned bank ME has previously said its customers won’t be impacted by the Wirecard issues, even though it uses third-party software licensed from a NZ company that was acquired by the German group.

Sources said payments group Till — which counts Meriton, 7-Eleven and Ticketek as customers — was putting the finishing touches on an agreement to take over Wirecard’s local merchant acquiring portfolio, which is part of different entity to that being sold to Change Financial.

Globally, London-based Railsbank agreed to acquire Wirecard Card Solutions, the group’s UK arm.