Mastercard moves on Nets units in its biggest acquisition
Mastercard has agreed to buy the majority of payment provider Nets' corporate services businesses in its largest-ever acquisition, per PitchBook data. The US banking giant will pay €2.85 billion (around $3.19 billion) for the Danish target's clearing and instant payment services and e-billing solutions.
The deal, which follows Mastercard's recent takeovers of New York-based Transactis and Transfast, will allow the company to deliver faster payments and extend its Mastercard Send and Transfast technologies that deliver cross-border payments to bank accounts, mobile wallets and cards. It also complements the company's 2016 acquisition of UK-based Vocalink for up to £869 million (about $1 billion at today's conversion rate).
The announcement comes less than two years after Nets was purchased by Hellman & Friedman for a reported $5.3 billion—resulting in the business delisting from NASDAQ Copenhagen—and about seven months after it merged with German peer Concardis. The Scandinavian business went public in 2016, reaching a market cap of 30 billion Danish kroner (around $4.5 billion today). Prior to listing, it was owned by investors including Advent International and Bain Capital.
With a presence in the Nordic and Baltic regions, Nets generated EBITDA of 2.9 billion Danish kroner in 2018 and revenue of 7.6 billion Danish kroner, down from 7.7 billion Danish kroner in revenue the year before. Serving more than 260,000 enterprises and over 240 banks, Nets will retain its e-ID and digitization services in a bid to focus solely on its merchant services operations after the Mastercard deal.
This latest move echoes ongoing consolidation in the payments industry, which has seen several multibillion-dollar transactions this year. In January 2019:
Fiserv agreed to buy KKR-backed and publicly traded First Data in a $22B stock deal.
In March 2019:
Fidelity National Information Services announced its takeover of Worldpay for around $34B.
In May 2019:
Global Payments, which agreed to a $21.5 billion merger with Total Systems.
This year could very well beat 2018's record year for financial software M&A, which stood at nearly €60 billion for 602 deals, according to the PitchBook Platform which is source of this article.