Germany: Lekkerland Set to buy German Subsidiary of Payzone

The company, which is headed by Mike Maloney, is believed to be preparing to sell its German subsidiary. Maloney told Irish media "We are looking at our options across the board."  It is understood that German wholesale giant Lekkerland, which supplies about 140,000 convenience stores, bakeries and petrol stations around Europe and is Payzone's biggest customer in its home market, is lining up a bid for the business.

Lekkerland, which has an annual turnover of more than €11 billion, sold the business to Payzone (then trading as Alphyra) in 2005 for about €16 million. Two earn-out payments totalling about €7 million remain outstanding and these are likely to be factored into the sale price.

With about €15 million having been invested in the business since its acquisition, Payzone might net €30 million or more from its sale, which is likely to include related businesses in Austria and Poland.
Presumably, any windfall will be set against Payzone's large debt, which currently stands at about €280 million.

If Germany goes, Payzone's focus will largely be on the UK and Irish markets. Payzone is also set to part company with chief operating officer Tim Murphy. The Irishman is preparing to leave the company and will take the electronic gift card business with him, which is used by retailers and shopping centres. The head of Payzone's Swedish arm is also leaving. Shares in Payzone were trading in London yesterday at 1.6 pence, an all-time low. They traded at over 70 pence each last December. The company is now worth just more than £7 million.

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