Ingenico Group Acquires Rival Bambora for 1.5B Euros

On Thursday, Ingenico Group, a French payment technology company, announced the acquisition of rival Bambora, a Swedish player in payment services, from the Stockholm-based private equity group Nordic Capital for 1.5 billion euros, or $1.7 billion dollars, the latest in a series of deals in the sector. The company also said its half-year results are in line with its 2017 goals.

The acquisition of Bambora, which had gross revenues of 202 million euros in 2016, would lift Ingenico’s earnings per share in 2018 and lead to collaboration, Ingenico said in a statement.

The transaction will be fully financed through available cash and debt and will boost Ingenico’s organic growth profile by 1% to 2% a year. The closing of the transaction is expected to happen by the end of 2017.

It also noted that the acquisition adds a dedicated direct-to-SMB sales channel to its retail business unit, and also expands its presence in Austraila with POS managed services as well as full estate management offering.

“Coupled with the investments made in our platforms and the development of new technological features, Bambora will enhance our customer-centric approach and will reinforce our online and in-store positioning through a perfect complimentarity,” said Ingenico Chairman and Chief Executive, Philippe Lazare.

The sale of Nordic Capital to a listed company is a relatively rare move in a market where usually buyout groups purchase units from large conglomerates.

Bambora, which has acquired by Nordic capital in 2014, has grown through a number of acquisitions and a 58 million euro investment in new products. Key add-on includes Beanstreams Internet Commerce, Asian IP Payments, DevCode Payments and Paybyway. It has around 700 staff across Europe, North America and Australia. In the next two years, Bambora’s gross revenue and earnings before interest tax depreciation and amortization are expected to rise 20% to 30% respectively, Ingenico said.

Bambora delivers in-store, mobile and online services through end-to-end payment solutions for over 110,000 retail customers, 70 different markets with managed transactions of over 55 billion euros. It is estimated Nordic Capital has made five times its money from its sale.

Ingenico’s takeover of Bambora follows a similar move this month by credit card processor Vantiv to buy Worldpay for 7.7 billion pounds, or $10 billion.

Earlier this month, French payment company Worldline said it had agreed to buy Swedish peer Digital River World Payments.

Payments firms have become targets for credit card companies and banks seeking to capitalize on a switch from cash transactions to paying by smartphone or other mobile devices.

Ingenico’s revenues for the half-year period were 1.22 billion euros, up 5% on a comparable basis and 8% on a reported basis, compared to 1.13 billion euros in the prior-year period.

EBITDA for the period was 244 million euros, representing 20% of revenue, and a flat with the year-ago period.

The company maintained its fiscal 2017 outlook for organic growth of 7% and EBITDA margin slightly above 20.6%.

Meanwhile, Ingenico Group traded 7.02%, or 5.79, to 88.30 euro. It opened in 84.80 euro, with a session high of 90.65 euro and a session low of 84.48 euro. Its market capitalization was 5.48 billion, with a P/E ratio of 23.13 and a dividend yield of 1.70%.

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