European payments firms Worldline and Equens have agreed to merge their financial processing businesses to create a new entity,called Equens Worldline Company.
The new entity will be owned 63.6% by Worldline and 36.4% by the current Equens shareholders.
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Headed by Equens CEO Michael Steinbach, the merged entity will become the largest pan-European financial processor with over 10 billion payment transfers, 6 billion POS and ATM transactions, 100 million cards under management and office locations in eight European countries.
Equens Worldline Company aims to target 2016 revenue of around EUR700m and OMDA of nearly EUR120m. The merger will expand Worldline’s presence in the Netherlands, Germany and Italy in addition to providing growth opportunities in the Nordics.
The merger will see 1,300 electronic payment experts from Equens joining the Worldline group.
Meantime, Worldline has agreed to purchase Equens’ commercial acquiring unit, PaySquare, for EUR72m in cash.
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By GlobalDataFollowing the acquisition, the PaySquare business will be integrated in Worldline merchant services & terminals global business line.
The transactions are expected to complete in the second quarter of 2016, subject to regulatory and antitrust authorities’ approvals.
The deal structured in two components will strengthen Worldline Group payment service industry leadership, with pro forma 2015 revenue increasing by c. EUR305m to exceed EUR1.5bn.
As part of the deal, Equens shareholders including ABN Amro Bank, DZ Bank, ICBPI, ING Bank and Rabobank, have agreed to renew their commercial contract for an additional five year period, which will represent a backlog of EUR1bn.
The transaction is expected to generate significant synergies of minimum EUR40m in 2018.
Worldline CEO Gilles Grapinet said: "From a shareholders’ perspective, this combination will provide significant value creation through the realization of considerable synergies, while preserving our strong financial flexibility. This merger will also allow us to provide to our respective customers even more efficient, reliable and highly innovative payment services."
Equens CEO Michael Steinbach said: "Joining forces with Worldline and creating the new entity, Equens Worldline Company, is a major milestone in consolidating the European payments market.
"Based on that, Equens Worldline Company will create new and innovative business opportunities. I am very excited about this joint future with a highly respected innovative company in the payments market and look forward to the promising future of the new Equens Worldline Company."
Equens, headquartered in Netherlands with estimated EUR305m in 2015 revenue, provides financial processing services to 50 financial institutions and commercial acquiring services to 120,000 merchants in four countries via its subsidiary PaySquare.
