Nexi’s acquisition of Nets creates Europe’s largest payments firm by volume
Nexi, the Milan-based payments processor which merged with SIA last month, is now set to buy rival Copenhagen-based Nets in a $9.2 billion (€7.8 billion) deal.
According to Bloomberg, the deal will create Europe’s largest payments firm by volume, number of customers and pre-tax earnings.
By market value, Netherlands-based Adyen is still the continent’s biggest payments processor.
The deal fine print
The all-share deal, announced on Sunday, also includes €1.8 billion in debt.
It meets the expectations of Nets’ – now former – owners, who sought a valuation of nearly $10 billion, having paid $5.2 billion for it back in 2018.
With this acquisition, Nexi’s pan-European payments giant status branches past Italy into German-speaking countries and the Nordics.
Nexi says it will as much as “quadruple” the firm’s footprint in Europe, opening it up to markets in 25 new countries. Most of which have low digital penetration rates.
Nets shareholders will initially receive 406.6 million new Nexi shares, making up 39% of the combined entity. When the SIA deal completes, Nets’ stake in Nexi will decrease to 31%.
Nets’ main owner, US firm Hellman & Friedman, as well as its smaller owners Advent International and Bain Capital, will keep shares in the combined entity.
Nexi anticipates the acquisition to generate some €170 million in synergies annually, and €2.9 billion in pro-forma revenue for 2020.
More M&A to come?
Nexi’s chief financial officer (CFO) Bernardo Mingrone said in a conference call on Monday that the latest deal means Nexi is “uniquely positioned to catch further M&A [merger and acquisition] opportunities”.
The firm mentioned three sectors where it would likely buy its way in. These are merchant banking, improving tech capabilities, and bank-owned payment assets.
The $9.2 billion-valued deal with Nets arrives just a month after Nexi merged with SIA, landing it a €15 billion valuation.
Fellow European payment giant rivals Worldline and Ingenico also merged this year. In February, the French firms merged in a €7.8 billion deal.
But it was in the US that consolidation first started to catch momentum in the payments industry. Fiserv announced its acquisition of First Data Corp. in a deal valued at $22 billion.