Strategic combination between Nexi and SIA to create a fully integrated European PayTech leader

On 5th October, Nexi S.p.A. (“Nexi”) and SIA S.p.A. (“SIA”) announced they have signed a memorandum of understanding (the “MoU”) regarding the integration of the two groups through the merger by incorporation of SIA into Nexi.

The MoU was also executed by the respective reference shareholders:

  • Mercury UK Holdco Limited (“Mercury”) for Nexi - company owned by Bain Capital, Advent International and Clessidra funds
  • CDP Equity (“CDPE”) and FSIA Investimenti S.r.l. (“FSIA”) for SIA

Below a brief summary of the key terms of the transaction:

  • The agreement envisages the merger by incorporation of SIA into Nexi on the basis of an exchange ratio of 1.5761 newly issued Nexi shares for each SIA share with resulting pro-forma ownership of ~70% for Nexi current shareholders and ~30% for SIA current shareholders. Accordingly, CDP, indirectly through CDP Equity and FSIA, will have an aggregate stake in the new group slightly in excess of 25% and Mercury will have a stake of ~23%
  • Significant value creation with €150m fully-phased recurring cash synergies and 15%-20% cash EPS accretion in 2022 at anticipated full run rate synergies / double digit cash EPS accretive in 2022 with 40%-50% synergies phasing
  • The Transaction will create a European champion in digital payments, with €1.8bn pro-forma aggregated net revenues and €1.0bn EBITDA as of December 2019
  • ~€4.6bn Equity Value of SIA implied at Nexi current share price, 2019 EV/EBITDA multiple of 13.6x including run-rate synergies
  • SIA is the Italian leading provider of mission-critical payment technology and infrastructure services to more than 2.3k clients, including financial institutions, corporates, PAs, central banks and other institutions in 50+ countries
  • SIA operates through its 3 business units: (i) Card & Merchant Solutions providing issuing and acquiring processing for credit, debit and prepaid cards; (ii) Digital Payments Solutions for processing retail and corporate payments and for the public administration and (iii) Network and Capital Market Solutions for banks and financial institutions to access key EU payments infrastructures and innovative blockchain-based solutions
  • Signing of Merger Agreement is expected by December 2020, subject to confirmatory due diligence. The completion of the Transaction is expected by the summer 2021, conditional to regulatory bodies, Antitrust authorities and shareholders’ approvals.

The Transaction represents a landmark for the consolidation of the Payments sector in Europe, creating a fully integrated European paytech leader ready to seize consolidation opportunities at international level.

The Transaction confirms once again Mediobanca strong relationship with Nexi and its shareholder Mercury, being the advisor of choice throughout all the transactions executed over the last five years since the disposal of former ICBPI to the Sponsors and then all the M&A deals to build up the undisputed Italian paytech leader - including the acquisition of Setefi, Bassilichi, MPS, Deutsche Bank Italia and the most recent Intesa Sanpaolo merchant acquiring books - as well as the successful completion of the IPO.

Mediobanca Group