Victor Ugochukwu · Oct 26, 2020 . 5min read
Italian digital payment firms Nexi and SIA collaborate to develop a fin-tech platform
Italian digital payments firms Nexi and SIA have collaborated to develop a fin-tech platform to capture the consolidated European market.
By Komal Joshi · Oct 6, 2020 . 5min read
On Monday, Italy’s most prominent payments firm Nexi announced a long-anticipated merger with rival SIA to develop a group with 1.8 billion euros ($2 billion) in annual revenue. It intends to expand further in Europe. Under the deal, Nexi’s shareholders will have 70% of the combined entity. In comparison, SIA’s investors will hold the residual 30%, as the new company bets on the more prominent platform to seek additional acquisitions in Europe’s payments-processing sector.
According to the blog post, Nexi’s private equity owners Bain Capital, Advent, and Clessidra, will possess 23% of the new group. The new group will be a continental Europe leader managing about 120 million cards and handling payments for roughly 2 million merchants, with a market value of more than 15 billion euros. Moreover, according to companies, it will process more than 21 billion transactions yearly.
Nexi and SIA Merger to finalize by 2021
The merger between Nexi and SIA is the second-biggest private equity deal of 2020. Nexi and SIA intend to develop a fintech platform to give tough competition in the European Market. It will most likely conclude by the summer of 2021. However, it is subject to certain conditions. Moreover, the new group will have a Pro-forma adjusted core profit of 1 billion euros. Additionally, it will possess fully-phased recurring cash synergies approximated at about 150 million euros and one-off Capex synergies at 65 million euros.
Nexi concentrates on the Italian market. Earlier, it was part of a significant pilot for a blockchain-powered interbank system in Italy back in 2018. Contrarily, SIA has created a third of its revenue overseas. Both Nexi and SIA are based in Milan. According to the blog post, they took approximately 18 months, plagued by lingering uncertainty over governance terms and valuations.
SIA’s biggest domestic client is UniCredit. A current agreement to resume their collaboration eliminated a significant hurdle for the deal with Nexi. The latter was recommended by Bank of America, Mediobanca, and HSBC, while JPMorgan and Rothschild represented SIA. Intesa Sanpaolo and Nomura advised Nexi’s top investor Mercury UK Holding, which is the investment vehicle of Bain and Advent.
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