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Milan-listed paytech Nexi has signed a strategic agreement with Italian bank Intesa Sanpaolo and BPER Banca to acquire their respective merchant acquiring businesses.
Nexi is taking over the businesses from Intesa Sanpaolo-owned Croatian bank Privredna Banka Zagreb (PBZ) and its subsidiary PBZ Card, and Italian lender BPER Banca and its subsidiary Banco di Sardegna.
The Croatian deal is valued at €180m and has an implied enterprise value multiple of about 10.5x while the Italian acquisition is valued at €318 million.
Under the acquisition agreement, BPER Banca is also set to receive additional €66 million in deferred payments subject to the achievement of certain economic and qualitative targets.
The acquisitions will add about 13,000 merchants from Intesa Sanpaolo and 110,000 vendors from BPER Banca to the Nexi payments ecosystem.
The Intesa Sanpaolo agreement will provide a gateway for Nexi to market and distribute its products in Croatia, while the latter will boost Nexi’s existing presence in Italy.
Both deals are expected to close later this year.
Completion of the Croatian deal is subject to closing conditions, including Nets CEE (a Nexi group company under Croatian law) obtaining a licence to operate as a payment institution in Croatia.
PBZ Card’s merchant acquiring business reportedly generated a total transaction volume of around €5 billion between March 2021 and March 2022.
BPER Banca’s business on the other hand generated approximately €13 billion in 2021.
The acquisitions broadens the existing partnership between Nexi and the banks.
In 2020, Nexi had entered into a similar agreement with Intesa Sanpaolo, buying its merchant acquiring business comprising approximately 180,000 merchants.
The agreement also included a 20-year marketing and distribution pact, bidding Intesa Sanpaolo to promote and distribute Nexi’s products and services.
The latest move further bolsters Nexi’s prevalent presence in the European paytech space, adding to the group’s series of consolidations in recent years.
Referring to the acquisitions, Paolo Bertoluzzo, the CEO of Nexi had back then said: “Our common journey, starting as local payments companies and transforming into a leading European PayTech, demonstrates our commitment to building trust and strength locally, be that in Italy, Germany, the Nordics, or other regions in Europe.
“This powerful strategic combination will allow us to create the largest pan-European platform with the scale to drive superior products and efficient leadership. the scale to drive superior products and efficiency leadership.”
Nexi’s procurement of merchant acquiring businesses highlights the payment companies’ drive to capitalise on the increasing digitalisation of the payments industry.
According to the Nilson Report, the domestic-only cards generated a purchase volume of $584.1 billion, with the top 45 merchant acquirers in Europe processing $125.1 billion in Visas and Mastercard transactions.
The report indicated the processing volume was up by 27% from the previous year.
To capitalise on the growing markets, payment technology companies have been looking to grow their operations, taking over the businesses from banks.
In January, Italian lender BNL sold 80% of its merchant acquiring entity Axepta Italy to French payments group Worldline.
The French entity is currently acquiring 80% of the merchant acquiring unit of Greek lender, Eurobank.
In March, NASDAQ-listed Euronet completed the purchase of the acquiring business belonging to Piraeus Bank in Greece.
In December, the National Bank of Greece also partnered with EVO Payments to form a 49:51 merchant acquiring joint venture to hold the bank’s merchant acquiring business.
The transaction is expected to close later this year.
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