Competition in the payments space is growing, with newer fintech companies coming into the industry that are more adaptable to changes in technology and consumer habits. Now, the sector is about to get a new big player, with Worldline set to acquire Ingenico, creating the fourth-largest company in the payments industry.
In a statement published this Monday, Worldline and Ingenico announced that their respective Boards of Directors had approved a merger agreement, in which Worldline would launch a tender offer for all of Ingenico shares, consisting of 81 percent stock and 19 percent cash.
Following the acquisition, the combined entity would offer its payment services to nearly 1 million merchants and 1,200 financial institutions. Furthermore, according to the statement, the transaction gives Ingenico an implied equity value of €7.8 billion ($8.6 billion).
Projected 2019 revenues for the combined entity is €5.3 billion, and operating margins of €1.2 billion. In addition, the French payments company expects the deal will create cost savings of €250 million over the next four years.
The transaction consists of a primary offer, in which, Ingenico shareholders will receive 11 Worldline shares and €160.5 in cash for seven shares tendered. A secondary exchange offer will see 56 Worldline shares traded in exchange for 29 Ingenico shares, and a secondary cash offer of €123.10 per Ingenico share.
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The Chief Executive Officer (CEO) of Worldline, Gilles Grapinet, will lead the fourth-largest company in the payments space as the CEO. Ingenico Chairman Bernard Bourigeaud is expected to be appointed as a non-executive chairman.
A “great day for Worldline and for Ingenico”
Commenting on the merger, Gilles Grapinet, Worldline’s Chairman and CEO, said in the statement: “I am proud to announce that today is a great day for Worldline and for Ingenico, and more widely for our Payment industry: Together we create the European World-Class leader in digital payments…”
“I am convinced that the combination of our respective remarkable talents pools, joint capabilities and state-of-the art offers will procure our combined Company an outstanding value proposition to pursue an exceptional growth benefitting to all our clients, banks and merchants alike and to all our business partners.”
“This is a landmark transaction for the industrial consolidation of European payments, highly value creative for all our stakeholders and for the shareholders of both companies, and which ambitions to reinforce the role of Europe within the global digital payment ecosystem.”