Two private equity-backed payments companies have announced a tie-up as the consolidation of the industry continues apace.
Nets, which was the subject last September of Europe’s biggest leveraged buyout in five years and is the leader in the Nordic region, has unveiled a merger with Concardis Payment Group a leading merchant payment service provider in the German-speaking part of Europe.
The deal, which was announced on June 4, is being structured as an all-paper exchange that will see Concardis shareholders contribute their shares in return for Nets shares.
The merger creates a business with approximately €1.3bn (US$1.5bn) of net revenue. The newly formed Group is backed by private equity investors Hellman & Friedman, which bought Nets, and Concardis owners Advent International and Bain Capital.
Nets CEO Bo Nilsson, who will lead the combined Group as CEO, said: “We want to shape the ongoing consolidation in the European payments industry and further drive our pan-European expansion. Germany offers attractive growth potential due to market size, consumer spending and the fact that around 75% of all payment transactions are still cash-based.”
Robert Hoffmann will continue to lead the Concardis Group as CEO, reporting directly to Nilsson. The headquarters of the new company will be located in Ballerup, Denmark, and Nets and Concardis Group will retain their respective brands.
The payments sector has been an active source of M&A deals as new technology changes the way consumers make payments, prompting a wave of start-ups and consolidation among established players.
Most recently, French group Worldline won a fight to buy Swiss stock market operator SIX’s payments unit for €2.3bn, narrowly beating a rival bid from Hellman & Friedman. Last year CVC Capital Partners and Blackstone bought UK provider Paysafe for £3bn, while US processor Vantiv paid £9.3bn for Worldpay.