It’s a sea snake that finally comes out of the water. The new combined group would form a European champion ranking fourth in the world with 5.3 billion euros inactivity. On the stock market, logically, Ingenico jumped. Worldline limits its withdrawal.
The plan to acquire Ingenico by Worldline is a “deeply friendly” operation, insisted Gilles Grapinet, CEO of Worldline, an operation between two “neighboring” companies, which have been working together and developed in parallel for years and operation in perfect timing for both companies. Ingenico has, it is true, proven to be back at the best level in the last few quarters, while Worldline has digested – faster than expected – important strategic advances with the acquisition of Six Payments and minorities of Equens.
So much for the general framework. The project to acquire the second by the first is also supported both by the boards of directors of the two groups and by the reference shareholders of each, the Swiss stock exchange operator Six and Atos on the one hand and BPIfrance on the other. Worldline’s shareholders will need to validate the deal in a second-quarter meeting. After the transaction, the shareholders of Ingenico will hold 35% of the group’s capital.
A three in 1 offer
The operation should take place according to three offers, one main and two subsidiaries. With the principal, Ingenico shareholders would receive 11 Worldline shares and 160.50 euros in cash against 7 Ingenico shares. According to the company, this represents a 24% premium on average prices weighted by volumes in recent months and a valuation for Ingenico of 7.8 billion euros. There would also be a subsidiary exchange offer, at the rate of 56 Worldline shares against 29 Ingenico shares representing, on Friday’s prices a theoretical price of 123.10 euros per share (with the drop in today’s Worldline share 118.8 euros), as well as a subsidiary cash offer at 123.10 euros per Ingenico share.
Above all, this operation would create “a world-class European champion in the electronic payments sector”, insisted Gilles Grapinet, since with its turnover of 5.3 billion euros, its 20,000 employees and a gross operating surplus 1.2 billion, it would take fourth place globally behind American actors just married (Fiserv and First Data, Fis and Worldpay, Global payments and TSys). “We were missing the size, with the transaction announced today, we are starting to have it,” said Worldline CEO.
European champion and growing market
This new European giant would have very solid positions, particularly in activities intended for merchants (physical as well as electronic) but also important relationships with a large number of banks around the world. It would cover the entire payments value chain, have strong geographic complementarity and a technology portfolio. Worldline will notably benefit from Ingenico’s contributions in the Germany-Austria zone and will have a solid bridgehead in the United States. Because of this strong complementarity claimed by the two groups, obtaining regulatory authorizations is not cause for concern according to leaders.
On the financial side, the transaction should generate 250 million euros in synergies per year between now and 2024 and have a positive effect on earnings per share from 2021, the first full year of reconciliation. The combined group will maintain a solid balance sheet and financial capacity to continue to drive the consolidation that will continue in Europe. The new group should continue to benefit from a sector with strong structural growth. It should, however, launch “without taboo” a strategic review on part of the activities of Ingenico, the Banks and Acquirers (B&A) division including among other payment terminals.