Italy’s Sia, the European leader in payments infrastructures and technological services for banks and financial companies, is studying a merger with with VocaLink, the British leader in payments infrastructures, Sky News revealed yesterday.
The news comes just a few days after a projected merger between payment sectors specialists French Worldline and Dutch Equens has been announced while last year Scandinavian Nets was bought by private equity funds managed by Advent International and Bain Capital, who in turn have just listed at the London Stock Exchange their portfolio company WorldPay. The payment infrastructure sector is then quite active in Europe and aiming at consolidation,
Talks between Sia and VocaLink are at a first stage, MF Milano Finanza confirms today, adding that the deal should partly consist in an exchange of shares between the actual shareholders of the two groups who are going to be shareholders of the new bigger borning group which is going to be valued about 3 billion euros.
Led by ceo Massimo Arrighetti, Sia is controlled by the italian Government sponsored Fondo Strategico d’Investimento while funds managed by F2i sgr and Orizzonte sgr have minority stake for a total consideration of slightly less than 60% in Sia’s shareholders capital (download here the press release). Sia processed 12.2 billion payments in 2014 and reached 426.3 million euros in revenues last year (from 380.3 millions in 2013), an ebitda of 122.2 millions (from 106,5 milioni) e un utile netto di 60,8 milioni (da 48,8 milioni).
In 2014 VocaLink processed more than 10 billion payments and reached about 177 million pounds in revenues, with operating profits of just 16.5 million pounds and a net profit of 11.9 millions.
VocaLink is chaired by Sir John Gieve, the former Bank of England deputy governor, and is owned by 17 British lending banks, with Barclays, HSBC, Lloyds Banking Group, Nationwide, Royal Bank of Scotland and Santander UK owning a controlling stake. Last Spring the new British Service Payments Regulator led by Hannah Nixon raised the possibility that the big banks should relinquish ownership of the UK-based company. So many international private equity funds showed their interest for the dossier with CVC Capital Partners and Permira in first line (see here the Financial Times).
VocaLink mandated Lazard last Spring in order to help it studing alternatives to fiannce future business growth going from a sale of a significant stake of shareholders’ capital to private equity firms to an issue of debt or to an ipo. A merger with Sia would bring Italian shareholders at control of the new group that would reach then the right size to be listed at the Stock Exchange which was a mid-term aim of private equity funds when they had invested in Sia at the end of 2012. back then the three funds had bought their stakes from a group of Italian banks and Sia had been valued 765 million euros of enterprise value or 8x the adjusted ebitda expected for 2013.