By Riccardo Colombo, Lorenzo Mirone, Federico De Rosa (Università Bocconi) Tim Bamberger and Affan Ahmed (King’s College London)
Overview of the deal
Implied Equity Value: €7.8bn
Total Transaction Size: €7.8bn - 100% of the target shares
Closed date: 15th of November 2020
Target advisor: Credit Suisse, JP Morgan - lead financial advisors
Just weeks after completing a deal with its domestic competitor Sia, Nexi has announced a €7.8bn all-shares merger with the Danish digital payments provider Nets. The transaction comes amid a wave of consolidation in the payments sector. This has been fueled by the need for scale of digital companies planning to undertake huge investments in technology, key to remaining competitive.
Following the deal, Nexi will become the European paytech leader, with a presence in more than 25 countries of the continent. Greater diversification and scale will go together with strong profitability, as shown by the €2.9bn in revenues and €1.5bn EBITDA projected for 2020.
Company Details: Acquirer – Nexi
Nexi SpA (formerly known as CartaSi) is a financial technology company based in Italy, and its core business is the provision of best-in-class services and digital infrastructures aimed at supporting banks, individuals, businesses, institutions and public administration. The products and services offered can be divided into three segments: Merchant Services & Solutions, Cards & Digital Payments, Digital Banking Solutions. Nexi is also a key player in the world of investments.
Founded in 2017, headquartered in Milan, Italy
CEO: Paolo Bertoluzzo
Number of employees: 1945
Market Cap: €9.8bn (as of 11/23/2020)
EV: €13bn (as of 11/23/2020)
LTM Revenue: €1.5bn (as of 6/30/2020)
LTM EBITDA: €405m (as of 6/30/2020)
LTM EV/Revenue: 8.5x
LTM EV/EBITDA: 32.1x
Company Details: Target - Nets
Nets is a leading provider of digital payment services and related technology solutions across Europe. Nets operates along the entire payment value chain, from payment authorisation to settlement. It operates through 3 main channels: Merchant Services, Issuer & eSecurity Services, and Corporate Services. In addition, Nets manages a deep-rooted network connecting merchants, financial institutions, corporate customers and consumers, enabling them to make and receive digital payments.
Founded in 1968, headquartered in Ballerup, Denmark
CEO: Bo Nilsson
Number of employees: 3000
Market Cap: NA
LTM Revenue: €721m (as of 6/30/2020)
LTM EBITDA: €273m (as of 6/30/2020)
LTM EV/Revenue: NA
LTM EV/EBITDA: NA
Projections and Assumptions
For both networks, a simple, oriented and properly-phased integration and synergy realization plan has been established. The synergies of Nexi-Nets rely primarily on merchant providers for sales and on those outside Italy for revenue. Nexi-SIA synergies concentrate primarily on revenue distribution and digital banking & corporate solutions.