Founded in 1989, EVO Payments Inc. is a payment processor servicing more than 550,000 merchants and processing more than 3.6 billion transactions annually. The company generated revenues of $486 million last year. As of the end of 2019 it employed 2,400 people.
The company (Nasdaq: EVOP) said that while it serves a diversified mix of merchants across Europe and North America, “many of these merchants operate in markets that are subject to broad governmental restrictions on movement and commerce, resulting in substantial reductions in merchant transaction count and volumes.”
In response, EVO said it has taken significant and necessary steps to align its cost structure and cash flows with the expected near-term decline in revenues caused by COVID-19. “These actions include a series of initiatives to reduce fixed costs up to 20% for the remainder of fiscal 2020 and lower capital expenditures by up to 75% over the same period. Such reductions will depend on the pace in which economic activity returns,” the company said.
In response to the global COVID-19 pandemic, EVO CEO James G. Kelly, and each of the company’s other top executives agreed to temporarily and voluntarily reduce their respective base salaries by 50%, effective immediately.
EVO also said it has received a $150 million investment from funds affiliated with Madison Dearborn Partners LLC, a private equity firm that has been a significant shareholder of the company since 2012.
EVO sold Madison Dearborn 152,250 shares of a newly created series of the company’s preferred stock. EVO said it also re-appointed Matthew W. Raino, managing director on the financial and transaction services team of Madison Dearborn Partners, to serve on EVO’s board effective April 1.
“MDP’s added resources will strengthen EVO’s financial profile and enable the company to remain focused on future strategic initiatives as it navigates the global COVID-19 pandemic,” EVO said.
EVO said a portion of the money it raised will be used to pay down debt, with the rest expected to be used to fund potential future investment opportunities
“We have taken decisive measures to ensure our business is best positioned to continue to serve our valued customers throughout this global pandemic,” said Kelly in a statement. “The long-term fundamentals of EVO’s business remain strong and, as the economy recovers, we believe these actions will support EVO’s continued growth through the execution of our strategic plan.”
By David Allison