Denmark-based payments firm Nets has decided to combine operations with German peer Concardis Payment Group to create a new European payments player.
The merger will involve share exchange between the shareholders of the two companies.
Under the agreement, Concardis’ private equity owners Bain and Advent will secure shares in Nets for their Concardis stock. The holding of Hellman & Friedman, which backs Nets, will be diluted as part of the deal.
The combined entity will be based in Ballerup, Denmark, and will be led by Nets CEO Bo Nilsson. It will have nearly €500m in earnings before interest, tax, depreciation and amortisation (EBITDA) and €1.3bn in net revenue.
Both the firms will retain their existing brands and will provide a comprehensive suite of payments services including mobile, recurring payments and real-time services.
The firms will also work together to enhance their services in order to better fulfil the requirements of consumers.
Commenting on the deal, Nilsson said: “We want to shape the ongoing consolidation in the European payments industry and further drive our pan-European expansion. Germany offers attractive growth potential due to market size, consumer spending and the fact that around 75% of all payment transactions are still cash-based.
“This merger with Concardis Group enables us to increase our exposure to the German-speaking part of Europe which, in addition to being a high-growth area, is an ideal springboard for the rest of Europe.”
The deal, subject to regulatory approvals, is expected to be completed in the fourth quarter of this year.