Cuscal Limited is set to acquire New Zealand payments provider Paymark for A$27 million, funded by a fully underwritten A$30 million institutional placement and a non-underwritten A$3 million share purchase plan. The deal, expected to complete by June 2026, will add scale and geographic diversification while being accretive to earnings in FY27.
- Acquisition of Paymark valued at A$27 million cash
- Equity raising includes A$30 million placement and A$3 million SPP
- Deal expected to be mid-single digit EPS accretive in FY27
- Minimal integration with standalone Paymark operations
- FY26 guidance reaffirmed with CET1 ratio around 18%-19% post-acquisition
Strategic Trans-Tasman Expansion
Cuscal Limited (ASX:CCL) is making a decisive move to broaden its payments infrastructure footprint by acquiring 100% of Paymark Limited, New Zealand’s leading payments service provider, for a cash consideration of A$27 million. The acquisition, subject to a French Works Council consultation and Worldline’s exercise of a put option, is expected to complete by 30 June 2026.
Paymark processes over 1.5 billion transactions annually, underpinning a significant slice of New Zealand’s payments ecosystem. Its business model and operations closely mirror Cuscal’s Australian acquiring and switching services, making the acquisition a natural fit that offers immediate scale and entry into a familiar, adjacent market.
Financial Impact and Funding Structure
The deal is projected to deliver mid-single digit earnings per share accretion in FY27 and a mid-teens return on invested capital, reflecting Paymark’s standalone profitability. Cuscal will fund the acquisition entirely through equity, comprising a fully underwritten A$30 million institutional placement priced at A$4.00 per share, a slight discount to recent trading, and a non-underwritten share purchase plan (SPP) targeting up to A$3 million from eligible shareholders.
Following completion, Cuscal expects its Common Equity Tier 1 (CET1) capital ratio to sit comfortably within its target range at approximately 18%-19%, well above regulatory minimums. The transaction values Paymark at around five times forecast FY27 net profit after tax, a multiple that suggests an attractive entry point for Cuscal.
Minimal Integration and Ongoing Investment
Paymark will continue to operate as a standalone entity, supported by its experienced in-market management team. This approach limits integration risk and disruption to Cuscal’s existing operations, which remain focused on strategic priorities such as the recent Indue acquisition and organic growth initiatives. Indeed, Cuscal’s ability to execute multiple strategic moves in quick succession, including the profit surge post-Indue acquisition, underscores its growing influence in the payments sector.
Paymark is currently undertaking a significant technology upgrade to its payments Switch, with an investment program costing approximately A$21 million expected to complete by FY30. This upgrade will be funded from Paymark’s own cash flow and is anticipated to enhance operational efficiency and resilience, further supporting long-term value creation for Cuscal shareholders.
Regulatory and Shareholder Considerations
The acquisition process is subject to customary regulatory and procedural steps, including the French Works Council consultation mandated by French labour laws due to Worldline’s ownership. While Cuscal expects Worldline to exercise the put option to sell Paymark, this remains at Worldline’s discretion. Importantly, Cuscal has received in-principle advice from the ASX that no shareholder approval is required for the transaction or equity raising, streamlining the path to completion.
Eligible Australian and New Zealand shareholders will have an opportunity to participate in the SPP, which offers shares at a discount and without brokerage fees, potentially broadening Cuscal’s shareholder base in both countries.
Reaffirmed Guidance Amid Growth
Cuscal has reaffirmed its FY26 financial guidance, anticipating high-single-digit transaction volume growth translating to mid-teens underlying net profit after tax growth. This confidence comes on the back of a series of strategic moves that continue to reshape Cuscal’s market position.
As Cuscal integrates Paymark into its portfolio, the market will be watching how the company balances growth ambitions with the complexities of cross-border acquisitions and ongoing technology investments.
Bottom Line?
Cuscal’s acquisition of Paymark marks a strategic leap into New Zealand’s payments infrastructure with promising financial returns, though execution hinges on regulatory approvals and Worldline’s put option decision.
Questions in the middle?
- Will Worldline exercise the put option to complete the Paymark sale by June 2026?
- How will Cuscal manage the standalone operation of Paymark alongside its existing businesses?
- What impact will Paymark’s Switch upgrade have on Cuscal’s long-term returns and operational efficiency?