The acquisition encompasses the management of 13.3 million payment cards, 1.4 billion transactions, POS terminals and ATMs
SIA, a European high-tech leader in payment infrastructure and services, and First Data Corporation (NYSE: FDC), a global leader in commerce-enabling technology, have signed an agreement for SIA to acquire First Data’s card processing businesses in parts of Central and Southeastern Europe for €375 million. In 2017, these businesses generated a combined revenue of approximately €100 million for First Data.
This acquisition by SIA provides card processing, card production, call center and back-office services, including 13.3 million payment cards, 1.4 billion transactions, in addition to the management of POS terminals and ATMs. These businesses are primarily located in 7 countries: Greece, Croatia, Czech Republic, Hungary, Romania, Serbia and Slovakia.
First Data remains highly committed to the European issuer processing business, maintaining its focus on serving its significant international client base, primarily with its leading VisionPLUS platform.
As a result of the transaction, SIA will become a leading player in processing and services in the region. The agreement includes the transfer of about 1,400 First Data employees into SIA.
“This acquisition is in line with our strategy to become the leading European independent digital payments platform. SIA is further strengthening its position in the e-payments international market, increasing its market shares in e-money high-growth countries,” said Massimo Arrighetti, CEO of SIA.
“This transaction aligns with our focus on portfolio management. While these are solid businesses, aspects of their operations are no longer core to our strategy, and this sale allows us to deploy the proceeds to create value in line with our capital allocation priorities,” said Frank Bisignano, Chairman and CEO of First Data. “We believe we have found an excellent partner for this transaction as SIA’s integrated payment infrastructure and service offerings and presence across Europe make it the perfect home for these businesses and puts our former customers in capable hands.”
The deal is expected to close in the third quarter of 2018 and is subject to normal closing conditions.
Deutsche Bank and K&L Gates were respectively financial advisors and counsel to First Data on the transaction.
HSBC acted as financial advisor to SIA, White & Case as legal advisor and PWC as tax and accounting due diligence advisor.
Nicola Cordone, Deputy CEO, Senior Vice President Global Business Solutions of SIA: “Thanks to the agreement with First Data, SIA Group continues on its path of international growth, confirming its leadership at European level in a sector like that of electronic payments undergoing continuous consolidation.
In particular, in Central and Southeastern Europe we will become the foremost technology provider in a market that in the coming three-year period will see a rise in payment transactions of over 11% per annum, nearly double the growth of Europe at 6%.
With this acquisition, SIA’s revenues, on a 2017 pro-forma basis, will increase by around 18% with a significant surge in income from outside Italy, which will rise from 20% to 33% of the total.
Our major business activities will also see an acceleration with a growth of 23% in payment transactions, 18% in cards managed, 107% in POS terminals and 56% in ATMs.
The acquisition will also have positive effects on the increase in payment volumes processed on our technology platforms, enabling SIA to achieve greater economies of scale and to propose itself as innovative partner at pan-European level”.