Up to 30 businesses are rumoured to be interested in bidding for
Italian processor SIA-SSB as the timeline to sell the business
draws to a close.
A range of suitors, including private equity, card processors,
non-cards processing competitors and IT and software businesses are
interested in making a bid, according to a source familiar with the
matter. The original deadline for formal bids for the business is
understood to be between 20 August and 10 September.
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The SIA-SSB board was then set to approve an information
memorandum on 4 September, which will provide more information to
interested parties. But it increasingly looks like this schedule
will be delayed. A SIA-SSB spokesman said the business was not able
to comment on market speculation.
That SIA-SSB has become a target for such a range of players is
because of its pan-European business mix and the benefits which are
set to come from the implementation of the Single Euro Payments
Area. The initiative aims to create a unified payment area in
Europe by 2010, meaning processors will have an opportunity to
generate greater economies of scale and enter countries which have
previously been dominated by monopolies.
SIA-SSB has around 1,800 employees and processed 6.4 billion
transactions in 2007, with 3.7 billion in debit and credit card
operations and 2.7 billion in payment and collections. The business
was formed as a result of a merger between payment systems SIA and
SSB in May 2007 and operates in 14 European countries with
significant customer bases.
Pan-European strengths
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By GlobalDataThe business’ main strength is its in-depth knowledge of payments
processing in the areas of automated clearing houses, card
processing and capital markets. The group made a profit of €2.3
million ($3.4 million) in 2007, with total revenues from services
and product sales amounting to €384.9 million. The value of
production was €403.4 million and the operating margin € 35
million.
SIA-SSB’s lead
shareholders, UniCredit (24 percent) and Intesa Sanpaolo (27
percent), hold a combined stake of 53 percent of the company. Other
smaller Italian banks hold most of the remaining sizeable stakes,
including Gruppo Monte dei Paschi di Siena and Instituto Centrale
delle Banche Popolare Italiane (ICBPI).
Atos Origin is one of the businesses considering a bid, according
to a Dow Jones Newswire report in July. Discussions began some time
ago, but had been interrupted by a dispute involving the company’s
main shareholders, investment funds Pardus Capital Management and
Centaurus Capital, which was resolved in May, the report
said.
The latest developments in the Italian payments industry come just
three weeks after Cards International revealed IBCPI was in
advanced talks to buy CartaSi, Italy’s largest card issuer. The
parties were set to conduct final due diligence on the deal as CI
went to press. The deal is expected to be announced by
October.
The potential moves are indirectly linked because SIA-SSB processes
CartaSi’s transactions. There had been speculation ICBPI might move
to switch this contract to Equens, the processor with which it has
a joint venture though its wholly-owned subsidiary, Seceti (see CI
405).
A senior industry player said the speculation points to a second
phase of acquiring and industry consolidation in Europe.
He said: “The first wave of mergers was when First Data was in as a
buyer. The second wave is on the horizon, and everyone is curious
about who will be involved, and it looks like SIA-SSB will be part
of it. I think another wave will follow as well, in countries like
Germany and Austria. Further down the line, we will see it happen
in places like Spain, which is more complicated to enter.”
William Cain
