Worldline, Ingenico to combine in $8.7 bn deal
04 Feb 2020
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French payments company Worldline SA and local rival Ingenico Group SA on Monday announced a 7.8 billion euro ($8.7 billion) share-and-cash deal, creating a European leader in payments business.
The boards of directors of the two companies have unanimously approved a business combination agreement pursuant to which Worldline would launch a tender offer for all Ingenico shares, consisting of an 81 per cent share and 19 per cent cash transaction, as of last closing prices.
The proposed transaction would combine two premier companies to create the world’s number four player in payment services with around 20,000 employees in approximately 50 countries with physical presence. Upon closing, the new combined group would offer best-in-class payment services to nearly 1 million merchants and 1,200 financial institutions.
Under the terms of the friendly transaction, to be implemented through a tender offer, Ingenico shareholders would receive 11 Worldline shares and €160.5 in cash for 7 Ingenico shares, with a mix and match mechanism
The shares are valued at a 24 per cent premium based on the last one-month volume weighted average share price, implying a transaction value of €7.8 billion and a 2020 EV/EBITDA multiple of 15 times based on guidance.
Under the terms of the tender offer, Ingenico shareholders would receive through a primary offer, 11 Worldline shares and €160.5 in cash for 7 shares tendered.
The offer represents a premium of 24 per cent based on the last one month respective volume weighted average share prices.
The tender offer for Ingenico shares will also include a secondary exchange offer of 56 Worldline shares in exchange for 29 Ingenico shares, translating into an offer price of €123.10 as of last close on 31 January 2020.
Ingenico shareholders will be able to elect one or a combination of the secondary offers, subject to proration and allocation adjustments that will ensure that, in the aggregate, the number of shares issued and the amount of cash paid shall be equal to those if all shares had been tendered into the primary offer.
Post transaction, Ingenico shareholders will own 35 per cent stake in the combined group while Worldline shareholders will own the remainng 65 per cent stake.
Worldline chairman and CEO Gilles Grapinet will become CEO of the combined company and Ingenico chairman Bernard Bourigeaud is expected to become non-executive chairman of the board of directors upon closing
The combination will create a new world-class leader in payment services with proforma 2019 net revenues of €5.3 billion and a payment ecosystem with a new global powerhouse in merchant services with combined revenue of €2.5 billion.
Ingenico’s extended partnership with leading German Savings Bank Group (DSV) will make the combination a platform of choice for continued consolidation in Europe and beyond, with distinctive track record of strategic partnerships with banking institutions.
“I am proud to announce that today is a great day for Worldline and for Ingenico, and more widely for our payment industry: Together we create the European world-class leader in digital payments,” Gilles Grapinet, Worldline’s chairman and chief executive officer, said.
“We deeply respect Ingenico and its team for the deep business repositioning of their company realized over the last years into one of the largest European payment service providers with outstanding global positions in online payments and merchant acquiring,” he added.
“The combination of Worldline and Ingenico offers a unique opportunity to create the undisputed European champion in payments on par with the largest international players. This transaction comes at the time of accelerating consolidation of the industry and I am convinced that the joined forces of both leaders will deeply transform the industry,” Bernard Bourigeaud, Ingenico’s chairman of the board of directors said.
“I am very pleased to write a new page in the European payment landscape and build the foundation of a strong and breakthrough payment player. This transaction is unanimously supported by Worldline and Ingenico’s Board of Directors and I would be very proud to become the non-executive chairman of the board of directors at closing to pursue this exceptional success story,” he added.
Paris-headquartered Ingenico is one of the main global payment services providers. In addition to a historical global number 1 market position as payment terminal manufacturer, with an estimated market share of 37 percent of the global payment terminal market and over 30 million terminals installed worldwide, Ingenico has built one of the strongest European merchant services business with 1.4 billion net revenue, and one of the best in class online offer through notably the successive acquisitions of Easycash, Ogone, Global Collect and Bambora.
Today, Ingenico provides to more than 550,000 merchants directly, a comprehensive portfolio of payment solutions beyond payment terminals including in store and online payment processing and the management of more than 300 payment methods. Ingenico has operations in 170 countries and employs around 8,000 employees.
The combination would help Worldline consolidate its existing position within the European payments landscape, reaching €300 billion of purchase volume acquired and 20 per cent of European market share in financial services, making it the number 3 online payment acceptance provider in Europe with. 250,000 e-commerce customers and websites, with acceptance of more than 350 payment methods and connection to more than 150 local acquirers
The combination will benefit from an exceptional reach in Continental Europe, with notably a new leadership position in Germany, a strong position in the Nordics and an enhanced access to French banks and merchants, in addition to Worldline’s historical leadership positions in Benelux, Switzerland and Austria.
It would also help expand global geographical coverage with access to the US market, reinforcement of Worldline’s exposure to merchants in Latin America and Asia-Pacific and expansion in low card penetrated countries.
