Shoosmiths Manchester advises on £10.5m international deal for digital payment solutions innovator ClearPay

Shoosmiths Manchester advises on £10.5m international deal for digital payment solutions innovator ClearPay

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Author: Lee Perry

The corporate team at the Manchester office of leading national law firm Shoosmiths has advised on the strategic acquisition of an innovative digital payments solutions provider based in the North West.

The public markets deal, a second in as many months for the team, involves AIM-listed ThinkSmart Limited, an Australia-headquartered company with 100 staff based in Old Trafford, Manchester, selling 90% of its shareholding in its subsidiary company ClearPay Finance.

ClearPay has been acquired by another Australian company, AfterPay Touch Group Limited, which is listed on the Australian stock market, in an all-share deal worth for AUS $18.55m (around £10.5m). AfterPay is a global payments company with a current market value of AUD $4bn created in just 4 years. AfterPay has operations in Australasia and the USA serving approximately 2.3m customers and 17,700 merchants.

ClearPay, was formed in July 2017 by ThinkSmart Europe, ThinkSmart's European subsidiary and formally launched in March this year. It allows retailers to offer their customers the ability at the point of sale to take interest free credit on purchases of up to £450 and spread the cost over three monthly payments.

Appealing to millennial consumers, the first-to-market technology includes a smartphone app, which allows customers to stay in control of their payments.

AfterPay is acquiring the ClearPay corporate entity, including ClearPay's contracts with relevant service providers and key employees with local knowledge of the UK market and regulatory landscape.

A proportion of the 10% shareholding in ClearPay retained by ThinkSmart will be made available to employees of ClearPay under an employee share ownership plan ("ESOP").

Ned Montarello, ThinkSmart's Executive Chairman, said: "The board is pleased to crystallize a significant return on investment for shareholders with the sale of 90% of ClearPay, while still retaining an ongoing investment in what, in our view is the leading player in this sector globally.

"AfterPay's product, ongoing success and go to market strategy is compelling and we are delighted to now be a part of this story. In a market three times the size of Australia the acquisition of ClearPay will assist AfterPay in becoming the dominant player in the UK market."

Advising ThinkSmart, the Shoosmiths' corporate team on the deal was made up of corporate partners Karen Procter and Tim Jackson-Smith, senior associate Benjamin Dredge and solicitor Thomas Baker. Financial services advice was provided by Manchester Head of Financial Services, Janet Dalton and senior associate Suzanne Taylor.

Karen Procter said: "This is an exciting deal for our long-standing client ThinkSmart. AfterPay will use the ClearPay acquisition as a means to expand in the UK, allowing it to move quickly in a fast-growing sector armed with the technical expertise and the knowledge of the UK regulatory framework the ClearPay team brings."

In July Shoosmiths Manchester corporate team advised Far East-based education provider Malvern International on a UK acquisition, and earlier in the year it represented fast-growing software company Matillion in a $20m fundraising deal with two Silicon Valley investors.

Karen Procter added: "International deals have been a clear trend for 2018 for our team. It's a wonderful vote of confidence in our region that so many North West companies are attracting interest from international investors and emphasises that despite the ongoing uncertainty over Brexit, that UK plc is very much open for business."