Ingenico Buys Swedish Rival in $1.7 Billion Payments Deal

Updated on
  • Acquisition is latest in hotly contested payments industry
  • Transaction to bolster Ingenico’s shift away from hardware

Ingenico Group SA agreed to buy Swedish rival Bambora for 1.5 billion euros ($1.7 billion) in the latest deal to jolt the payments industry as the French company accelerates a shift away from hardware to gain scale in online transactions.

The acquisition of Stockholm-based Bambora from Nordic Capital, financed through cash and debt, should boost Ingenico’s revenue growth by 1 to 2 percentage points annually while also increasing earnings-per-share by about 5 percent in 2018, the Paris-based company said Thursday. Bambora provides online payments for 110,000 shops and companies and had 202 million euros of revenue in 2016.

“We’ve moved over the years from a hardware provider to full electronic payments company, through acquisitions,” Ingenico Chief Executive Officer Philippe Lazare said in a call with analysts. “We’re adding another piece with Bambora,” while leaving Ingenico with “flexibility for future M&A.”

The stock jumped as much as 9.9 percent in Paris trading, adding 6.1 percent to 87.54 euros as of 9:38 a.m. Of 23 analysts that cover the stock, 12 have buy recommendations and 8 advise holding the shares. Only 3 say sell, according to data compiled by Bloomberg.

Consolidation is accelerating in the rapidly growing payments sector as consumers migrate to online purchases and electronic payments. Vantiv Inc. of the U.S. agreed this month to buy Worldpay Group Plc for 7.7 billion pounds ($9.9 billion) and Permira and Nordic Capital are among buyout firms considering bids for Nets A/S, the Danish payment-services provider that has attracted takeover interest, people with knowledge of the matter said last week.

By seeking to bundle a variety of off-and-online solutions into a single offering for merchants, Ingenico aims to accelerate their transition to new modes of payment in the advent of cashless societies. Bambora bolsters Ingenico’s online payments services, international presence and digital expertise, Lazare said.

Bambora’s top management will reinvest a “meaningful part of their proceeds” in Ingenico shares and will be “fully involved” in developing Bambora activities within Ingenico, the companies said. Bambora employs 700 people across Europe, North America and Australia, compared to Ingenico’s 6,850 employees.

Ingenico’s sales in the first half rose 8 percent to 1.22 billion euros, it said, confirming its targets for the year.

(Updates with comments from earnings call in third paragraph.)
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