Sector Insight
Value added
Global Refund, incorporated in The Netherlands, is the world-leader in Value Added Tax (VAT) refund services to travellers, processing approximately 90% of the outsourced global VAT refund market. The company has a presence in more than 37 countries, with over 200 international Cash Refund offices on four continents, supporting clients in Europe, Asia and the Americas.
More than 225,000 affiliated retailers, which include most of the world’s major luxury brands, offer the service worldwide to give approximately 22,000 travellers a day the opportunity to get their VAT back. More than 400 hotels, airport shops and other retailers use the company’s Dynamic Currency Conversion, which allows foreign shoppers to pay in their home currencies. Global Refund’s "Tax Free Shopping" logo is recognized by more than 80% of all eligible travellers.
VAT is mandatory for all countries within the European Union and has been adopted by other countries throughout the world. A basic principle of any VAT system is not to levy VAT on exports, therefore VAT laws in more enlightened societies provide an exemption on goods which are sold to foreign travellers who export the items.
In August 1999, funds advised by Apax Partners backed the management buy-out of Global Refund Group from Cendant Corporation, a global provider of travel, real estate, vehicle and financial services.
Funds advised by Apax Partners acquired a majority equity stake. Fexco, an Irish financial services company, contributed cash and its equity in two joint ventures with Global Refund in exchange for a substantial minority stake in the new company. The Global Refund management team, led by the Chief Executive, Per Setterberg, invested for a 13% stake. A syndicate of Bank of Scotland, Royal Bank of Scotland and AIB provided €95 million of senior debt.
Global Refund in April 2004 successfully completed a €95m refinancing, allowing it to substantially repay investors, which included funds advised by Apax Partners.
Global Refund benefits from the continued growth in the number of countries introducing a value added tax system and growth in world tourism, alongside the ongoing trend by retailers to outsource their VAT refund administration.
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