Unicredit Business Integrated Solutions (Ubis), a subsidiary of Unicredit group, signed an agreement for the sale to Sia spa of the processing activities of around 13.5 million payment cards and the management of 206,000 POS terminals and 12,000 ATMs in Italy, Germany and Austria (download here the press release). Headquartered in Italy, Sia is the European leader in payments infrastructures and technological services for banks and financial companies.
The deal is valued 500 million euros or 12x FY 2015’s ebitda (more than 41 million euros) after 108 million euros in revenues. The deal includes a ten-year outsourcing contract for the supply of processing services for transactions made using debit, credit and prepaid cards, and for the management of POS and ATM terminals.
Thanks to this agreement, in the e-money sector, Sia’s pro-forma 2015 figures indicate an increase in card payment transactions from around 4 billion to over 5 billion and an increase in 2015 pro-forma revenues by over 20%. Sia actually had reached 449.4 million euros in revenues in 2015 (from 426.3 millions in 2014), an ebitda of 123.9 millions (from 122.2 millions) and a net financial position of 108.7 millions (from 75.5 millions).
The deal has to be read in the frame of the strategic review which has been announced by new Unicredit’s ceo Jean Pierre Mustier who is targeting an increase of the Common Equity Tier 1 ratio (download here Unicredit’s press release). The transaction will generate a consolidated net capital gain of around 440 million euros for Unicredit in 2016, with an expected positive impact on the fully loaded CET1 ratio of about 12 bps.
Financial advisors to Unicredit are PwC and Hsbc, while Dla Piper advised on the legal issues. Sia was instead supported by Studio Chiomenti law firm, by Studio Tremontias for the fiscal issues and by Ernst & Young as for the financial issues.
“This acquisition allows Sia to strengthen further its competitive positioning at domestic and international level, especially in Germany and Austria, two of the main target markets in the 2016-2018 Business Plan, to increase the volumes of the payments managed on our technology platforms and thus achieve greater economies of scale”, Sia’s ceo Massimo Arrighetti said.
Sia is then well paving the way towards its ipo which has been announced by Mr. Arrighetti last March, who said that companies in the same sector had been valued in range of 11-14x ebitda in the last European deals, Which means that Sia may be valued between 1.36 to 1.73 billion euros (see here a previous post by BeBeez).
Last April Sia was said to target its ipo by next September with a floating capital of 35-40% (see here a previous post by BeBeez). However back then Brexit was still not believed to be a serious threath to the financial markets. Whiile now the timing for an ipo is not clear.
Last novembre 2015 Sia had started talks for a merger with with VocaLink, the British leader in payments infrastructures (see here a previous post by BeBeez), but talks did not get to any deal.
Cdp Equity (former named Fondo Strategico Italiano) is Sia’s major shareholder with a 49.48% stake and may sell a significant part of its stake in the ipo, while infrastrucutre fund F2i (17.05%) may sell all its stake. Sia’s other shareholders are Orizzonte sgr (8.64%), Intesa Sanpaolo (3.97%), Unicredit (3.97%), Banco Popolare (2.52%), Banca Mediolanum (2.85%) and Deutsche Bank (2,58%).
Meanwhile, from the beginning of 2016, Sia has started up several innovative initiatives at international level including:
- the development of the pan-European instant payment infrastructure with EBA Clearing due to start up by the end of 2017;
- the realization of the new interbank payments system of New Zealand’s Central Bank (the 14th central institution between Europe, Africa, the Middle East and Oceania to adopt SIA’s technologies);
- the agreement with Raphaels Bank for the development and launch of new SEPA payment solutions, and of cards and services via mobile in the United Kingdom and in the rest of Europe;
- the realization of the first mobile wallet for NFC payments in the Czech Republic supporting MasterCard and VISA circuits for CSOB bank, part of Belgian Group KBC.
