French payment service provider, Worldline (Euronext: WLN) entered into a binding agreement for the acquisition of Italy’s Banco Desio’s merchant acquiring activities for $100 million.
“This operation is fully in line with our strategy to further expand our Merchant Services activities towards the South of Europe and in particular in Italy, a highly attractive and strategic market for Worldline where we intend to continue leveraging our footprint built last year through the acquisition of Axepta Italy early 2022,” said Worldline’s CEO, Gilles Grapinet.
Announced on Monday, 100 percent of the bank’s merchant acquiring activities will be obtained through the locally formed joint venture, Worldline MS Italy. The two companies expect to close the deal by the first quarter of 2023, depending on regulatory approval.
Worldline will also set up a commercial partnership with Banco Desio to leverage the banking network in the distribution of the French company’s payment products and services to the merchant customer of the Italian bank.
The acquisition came as the Italian bank was looking for a partner to “acquire, operate and develop” its portfolios around merchant acquiring business. For Worldline, it is reinforcing its presence in Italy, which is a “highly attractive and strategic market.”
It is one of Worldline’s many acquisition deals through which the company is bolstering its dominance. The company bought its French rival Ingenico in 2020, paying €7.8 billion. In addition, it acquired Handelsbanken’s card-acquiring activities in the Nordic region and a controlling stake in ANZ’s commercial acquiring business.
However, the company is in talks to sell its TSS terminals business to US-based Apollo Funds in a deal of around €2.3 billion. The deal is expected to cut the company’s debt and simplify its corporate structure if it materializes.
A Lucrative Business
Banco Desio’s merchant acquiring activities will expand Worldline’s network significantly. The Italian bank delivers payment solutions to around 15,000 merchants and manages the marketing and distribution of over 19,000 Point-of-Sale (PoS) to merchants.
Worldline is expecting an additional €15 million in revenue within a year of the acquisition and double-digit organic growth of this figure. The payment firm generated €2.02 billion in revenue in the first half of 2022 as the figure increased by 12.6 percent year-over-year.
“This transaction offers attractive development opportunities for Worldline in the coming years, leveraging a strong banking network as a key commercial channel in order to distribute Worldline’s full suite of end-to-end payment solutions to merchants,” Grapinet added.
“With this transaction, Worldline keeps on playing the leading role in the consolidation of the European payments industry, with a focus on value-creating consolidation opportunities, enhancing Worldline scale, reach and significant presence in a growing number of countries.”
