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October 23, 2020Blog Posts

Wirecard’s U.S. Operations Sold to Texas-Based Payments Company

The Wall Street Journal

Wirecard AG’s bankruptcy administrator has sold the failed German fintech’s U.S. operations to a company backed by buyout specialist Centerbridge Partners LP, as it continues to dismantle the remains of the business and earn some cash for creditors.

The administrator didn’t say how much Texas-based Syncapay Inc., whose investors also include private-equity firms Bain Capital Ventures and Silversmith Capital Partners, paid for the unit. The U.S. arm has remained a largely autonomous, separate legal entity since Wirecard bought the business from Citigroup Inc. in 2016. It issues prepaid cards, which are often used as consumer vouchers or for refunds by companies.

Wirecard investors have been betting this disposal and others being overseen by the administrator are unlikely to generate significant proceeds. The company has a total market value of about €74 million, equivalent to $87.5 million. Wirecard initially paid about $300 million for the U.S. operation, according to a person familiar with the matter. That said, the scandal has raised questions over the company’s accounting of its assets.

Wirecard collapsed in June after auditors found a $2 billion hole in its balance sheet. German prosecutors are investigating former Wirecard officials over accounting fraud and money laundering.

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