Manchester payment solutions business sold for £10m

Manchester based ThinkSmart Europe has sold its recently-launched payment solutions business, ClearPay, for around £10.5m to fast-growing global Australian company AfterPay.

Fintech firm ThinkSmart employs around 100 people at its base on Talbot Road, Old Trafford.

ClearPay was developed by a team led by ThinkSmart’s executive chairman Ned Montarello.

ThinkSmart has sold 90% of the share capital of ClearPay to AfterPay Touch Group.

ClearPay started trading in July 2017 and was formally launched in March 2018.

ClaearPay allows retailers to offer their customers the ability at the point of sale to make purchases of up to £450 and spread the cost over three interest-free monthly payments.

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

ClearPay’s existing retailers and customers currently using ClearPay’s system will be given the option of moving onto AfterPay’s global platform.

The service is expected to be launched within the next 6 months.

The company’s subsidiary, RentSmart Limited has entered into a business separation and transitional services agreement with ClearPay to support the transaction and facilitate the transition to AfterPay.

A proportion of the 10% shareholding in ClearPay retained by Think Smart will be made available to employees of ClearPay under an employee share ownership plan.
For the 12 month period to 30 June 2018 ClearPay incurred unaudited losses of £600,000 and at 30 June 2018 had unaudited balance sheet net assets of £1.4m.

Ned Montarello 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, having recently successfully entered the US market.

“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 with the potential for significant growth over the next five years.”

A team led by Karen Procter, corporate partner at law firm Shoosmiths in Manchester, advised ThinkSmart on the deal.