By Arasu Kannagi Basil
(Reuters) -Corpay will buy British peer Alpha Group in a $2.2 billion (1.6 billion pounds) cash deal, the U.S.-based business payments firm said on Wednesday, to expand in the fast-growing private markets.
The private markets business is gaining traction globally as institutional investor clients seek more efficient and tech-enabled services.
Alpha, which holds about $3 billion of deposits in more than 7,000 client accounts, pioneered alternative bank accounts for investment managers and the acquisition will help the Atlanta-based company boost its presence in Europe.
“The banking account product and Alpha’s technology extend our cross-border solution set and further diversify our revenue streams,” said Corpay CEO Ron Clarke.
Roughly two-thirds of the UK-based company’s revenue comes from the private markets and institutional funds vertical, Corpay executives said.
Its corporate foreign-exchange business will also strengthen Corpay’s cross-border business in the UK and Europe and open up new markets in Germany, Malta and the Netherlands, executives said.
Alpha shareholders will receive 4,250 pence per share, representing a 55% premium to the closing price on May 1, a day before possible takeover talks were disclosed.
Shares of Alpha, which rejected the May proposal, jumped 25.3% to 4,155 pence. Corpay rose 0.7%.
The transaction is expected to boost Corpay’s 2026 earnings per share by at least 50 cents and push its corporate payments revenue north of $2 billion next year.
Alpha’s founder Morgan Tillbrook, who is the company’s largest shareholder with a 12% stake, has agreed to support the transaction.
Corpay expects to fund the deal, likely to close in the fourth quarter, through a mix of cash, debt and non-core divestitures.
Oppenheimer Europe and Jones Day advised Corpay on the deal.
($1 = 0.7387 pounds)
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)
