A new reality is born in the digital payments sector. Banco Bpm, Bcc Iccrea Group and Fsi have signed a binding agreement for the establishment of a strategic partnership aimed at the development of Pay Holding which will be active in the sector of digital payments and aims to become a point of reference in the fintech landscape.
The details of the agreement: 600 million to Banco Bpm
The agreement provides for the contribution to the joint venture of Banco Bpm's e-money business, which will receive a mixed consideration in cash and in shares issued by the Pay Holding vehicle up to 600 million.
At the end of the operation, Pay Holding will be owned for approximately 43% by the FSI fund and approximately 28,6% each by Banco BPM and Iccrea Banca.
The agreement provides for some preparatory activities for the finalization of the transaction, with the aim of reaching the closing within the first quarter of 2024, and a lock-up of Banco Bpm until 2026.
The second operator in the payments sector is born
Following the transfer of Banco Bpm's e-money business, the joint venture will represent the second national operator with a market share of more than 10% in the e-money sector, with approximately 9 million cards, 400 POSs and approximately €110 billion in intermediated transactions.
For its development, the company will be able to count on the network of over 1.300 branches of Banco Bpm and of the 117 Bccs with almost 2.500 branches of the Bcc Iccrea group, a network which as a whole represents almost 20% of the bank branches present in Italy.
The agreement provides for the signing of a multi-year distribution agreement of the company's services also on the Banco Bpm network.
Banco Bpm: positive impact on Cet1 from the transaction
According to the provisions of the agreement, Banco Bpm will preserve the current commission margins generated by e-money, equal to over 140 million in net revenues in 2022, with an increase of 13% compared to 2021, in addition to the contribution of the profits expected from the joint venture as well as the potential increases in the value of its equity investment.
As mentioned, as a result of the transaction, Banco Bpm will receive an immediate consideration of 500 million euro for the assets transferred, with an upfront cash component of approximately 200 million euro, to which the deferred components of
price, for a further maximum of 100 million euros, which could lead to a value of 600 million euros.
At the time of closing, the transaction will have a positive impact on Cet1 fully loaded ratio of Banco BPM estimated at around 32 bps1, including the effect of the acquisition of the investment. Also considering any future price additions, the effect on the fully loaded CET1 ratio could rise up to around 50 bps1.
"Overall, the operation will generate a valuation benefit for Banco Bpm of over 2 billion euros in terms of NPV over the reference time horizon of the agreement", underlines the bank led by Giuseppe Castagna.
