Italian payments processor Nexi has inked a binding framework agreement to acquire pan-European paytech firm Nets.
This all-share deal values Nets at €7.8bn ($9.2bn). The combination is supported by shareholders of both Nexi and Nets.
Under the agreement, Nets will be incorporated into Nexi, and Nets shareholders will receive nearly 406.6 million new Nexi shares.
This results in Nets owning 39% of the combined entity on a pro forma basis, while Nexi will own 61%.
Nets shareholders will receive the Nexi shares based on a lockup mechanism of up to 24 months.
Nets serves over 740,000 merchants and 250 financial institutions globally. It has issued over 40 million cards and manages €125bn of card payments annually.
The latest merger comes weeks after Nexi signed a memorandum of understanding (MoU) to buy rival payments provider SIA for €4.56bn ($5.3bn) in shares.
These two transactions, when completed, will create a new Nexi-Nets-SIA group in Europe, in which Nets shareholders will have a 31% holding.
Meanwhile, Italian government-owned lender CDP, which is the controlling shareholder in SIA, will own 17% in the new group.
The new payments giant resulting from the mergers is expected to be a leader in the European paytech space.
Nexi said that the two transactions will create a new group with €2.9bn in pro forma aggregated revenues and €1.5bn EBITDA for FY2020.
The Nexi-SIA integration will generate annual recurring cash synergies of €150m, while the Nexi-Nets integration will generate €170m.
The Nexi-Nets synergies will focus on merchant services, while the Nexi-SIA synergies will focus on card issuing, digital banking and corporate solutions.
Nexi is expected to close the Nets deal in the second quarter of 2021, while the completion of the SIA deal is anticipated in the third quarter.
Nets CEO Bo Nilsson said: “We are incredibly excited to join forces with Nexi, with whom we will continue to shape the industry and capture significant growth opportunities across the sector through our presence in structurally attractive payment markets such as Germany, Austria, and Switzerland, as well as in the fast-growing Polish market.”
Nexi CEO Paolo Bertoluzzo said: “The transaction, which follows the announced MoU for the merger with SIA, creates the European paytech leader with unique scale and capabilities to best serve and support all our customers across Europe, from citizens to merchants, from partner banks to corporates, from public administration to other institutions.
“The new group, with reach in over 25 countries, will act as digitalisation engine in Europe, driving the transition to digital and cashless.”