The eyes of Piazza Affari are signed on Nexi that later 14 days of negotiations signed a binding merger agreement with Nets, Danish electronic payments groupi active in 20 countries and controlled by a consortium of private equity funds.
At the start, the shares of the company led by Paolo Bertoluzzo gained more than 3% at 15,23 euros, before settling down at 10 at a share 15,03 euros (+2,18%).
Going into the details of the agreement, the wedding between the two groups will lead to the birth of a reality of payments with 2020 pro-forma aggregate revenues of €2,9 billion, an ebitda of 1,5 billion and operating cash flow of 1,2 billion. Numbers that take into account the expected synergies, estimated at around 170 million per year when fully operational, to which would be added 150 million per year of synergies deriving from the combination between Nexi and Sia.
The operation will have to be examined by the extraordinary shareholders' meeting which will have to approve the merger in the first three months of 2021 through the so-called “whitewash” mechanism.
The integration between the two companies will be carried out entirely in shares: Nets shareholders will receive 406,6 million new Nexi shares equivalent to a pro forma 39% shareholding in the new Nexi-Nets entity and 31% when considering the Nexi-Nets-Sia combination. Nexi shares issued to Nets shareholders will not be salable for two years after the closing: the lockup agreement establishes that 1/3 of these will be subject to lock-up for 6 months, 1/3 for 12 months, and the remaining 1/3 for 24 months.
The transaction values Nets 7,8 billion in terms of enterprise value and estimates a potential earn-out of up to 250 million to be paid with new Nexi shares in 2022, linked to the 2021 EBITDA.
Upon closing of the merger with Nets, the shares in the pro-forma entity will be distributed as follows:
- 21% Hellman & Friedman,
- 13% Advent International & Bain Capital,
- 12% Mercury UK,
- 6% Intesa Sanpaolo,
- 4% GIC Private Equity.
The free float will be 44%.
Once both the marriages with Nets and those with Sia are concluded (the latter expected by the third quarter of 2021%), Cdp will hold a 17% stake in the pro-forma entity, Hellman & Friedman 16%, Advent International & Bain Capital 10%, Mercury UK 10%, Intesa Sanpaolo 5%, GIC 3% with a free float of approximately 38%. The new group will remain listed on Borsa Italiana.
Moving on to the governance of the new group, Michaela Castelli, current President of Nexi, will also be president of the new group, while Paolo Bertoluzzo will be group CEO. Current Netes Chief Executive Officer Bo Nilsson will become a non-executive member of Nexi's board of directors and assume the position of Chairman of Nets. In addition, Hellman & Friedman will also appoint another board member upon completion.
"The leading PayTech at European level is born with unique scale and skills to better serve all the customers of the new group in Europe: from citizens to merchants, from partner banks to companies, from the Public Administration to institutions. Nexi will have the opportunity to develop in a market four times larger than the current one and still under-penetrated and with double-digit growth rates”, commented the CEO of Nexi, Paolo Bertoluzzo.
“We are thrilled to be able to join our forces with those of Nexi – added the CEO of Nets, Bo Nilsson – with whom we will be able to represent a point of reference for the payment industry and seize new growth opportunities across the industry thanks to our presence in structurally attractive markets such as Germany, Austria and Switzerland, as well as in a fast-growing market such as Poland. Denmark and Northern European countries remain important focus areas for the group, leveraging the experience that Nets has developed in serving one of Europe's most advanced regions from a digital point of view”.
