Nets Acquisition: Key Details, Impact, and What Comes Next

The acquisition of Nets by Nexi marks a significant milestone in the European PayTech industry. Announced on November 16, 2020, this all-share merger creates Europe's largest payments group by volume and customer base. The combined entity is poised to enhance market reach and capabilities, driving innovation and efficiency in the rapidly evolving digital payments sector.

What Is Nets?

Founded in 1968, Nets A/S is a key player in the European PayTech industry, offering a comprehensive range of payment solutions, including in-store and online payments, merchant services, and digital identity services like MitID. As part of the Nexi Group, Nets leverages its extensive expertise and ecosystem to deliver fast, secure, and innovative payment solutions. Its unique position within the Nexi Group enhances its ability to provide cutting-edge digital payment services across Europe.

Who Acquired Nets?

Nexi is a prominent provider of digital payment solutions in Italy, catering to various business sectors with tailored products. The company offers a comprehensive range of POS solutions, including SmartPOS and Mobile POS, as well as e-commerce services like XPay and Vetrina Digitale. Nexi also provides payment cards for personal and business use, emphasizing secure transactions and fraud prevention. With its innovative approach, Nexi significantly influences the digital payment landscape in Italy.

When Was Nets Acquired?

Nexi announced the acquisition of Nets on November 16, 2020. This strategic move came during a period of significant consolidation in the payments industry, marked by Nexi's recent merger with SIA and other major deals like the Worldline-Ingenico merger. The timing capitalized on the accelerated shift towards digital payments, driven by the COVID-19 pandemic, positioning Nexi to expand its market reach and capabilities in the evolving European PayTech landscape.

Why Was Nets Acquired?

• Market Expansion: The merger between Nexi and Nets significantly expands their market presence, creating Europe's largest payments group. This strategic combination enhances their footprint in over 25 countries, including high-growth areas like Germany, Austria, Switzerland, and Poland. The expanded market reach allows Nexi to tap into regions with low digital penetration rates, positioning the company for substantial growth.
• Technology Integration: The merger leverages the advanced digital payment technologies of both Nexi and Nets, creating a robust and comprehensive PayTech platform. This integration focuses on capturing market opportunities from the shift from cash to card payments, enhancing their service offerings with innovative digital payment products. The planned acquisition of SIA further strengthens their technological capabilities, providing a superior technology stack across the payment ecosystem.
• Competitive Advantage: The combined entity benefits from significant scale, capabilities, and market presence, establishing a strong competitive position in the PayTech industry. The merger creates a "one-stop-shop" for digital payments, offering the simplest, fastest, and safest payment solutions. Additionally, the anticipated annual synergies and increased e-commerce exposure further enhance Nexi's ability to deliver superior products and maintain efficiency leadership.

Acquisition Terms

• Acquisition Price: The acquisition was valued at 7.8 billion euros ($9.2 billion).
• Payment Method: The transaction was an all-share deal.
• Key Conditions or Agreements:
  • Nets shareholders will receive new Nexi shares subject to a staggered lockup of between six and 24 months.
  • Nets shareholders could receive up to 250 million euros of additional shares depending on Nets' 2021 core profit.
  • The merger requires antitrust approval and is expected to close in the second quarter of 2021.
  • The deal includes 1.8 billion euros in debt.
  • Governance changes include Paolo Bertoluzzo becoming Group CEO and Bo Nilsson becoming Chairman of Nets and a Non-Executive Board member of Nexi.

Impact on Nets

The acquisition of Nets by Nexi has led to significant changes in operations and management. The merger has created a new entity known as Nexi Group, with Paolo Bertoluzzo as the Group CEO and Bo Nilsson as Chairman of Nets and a Non-Executive Board member of Nexi. This strategic combination has resulted in a more resilient organization with increased market and client diversification. The integration of Nets and SIA into Nexi is expected to bring annual benefits estimated at 320 million euros, enhancing the company's operational efficiency and market reach.

The merger has also impacted Nets' product offerings and services. The combined entity now offers a comprehensive portfolio of payment solutions, leveraging the strengths of both companies to provide innovative and secure payment services across Europe. The expanded market reach, covering over 25 countries, allows Nexi to tap into regions with low digital penetration rates, positioning the company for substantial growth. While specific employee and customer reactions are not detailed, the merger is anticipated to benefit all stakeholders by offering enhanced services and a broader product range.

For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.