June 4, 2018 / 10:41 AM / a year ago

Scandinavian payments group Nets to merge with German peer Concardis

FRANKFURT, June 4 (Reuters) - Scandinavian payments group Nets is planning to merge with German peer Concardis in a multi-billion euro transaction, adding to a string of deals in the rapidly consolidating industry.

The deal will create a business with annual earnings before interest, tax, depreciation and amortisation of 500 million euros ($587 million) on 1.3 billion euros of revenues, the two private equity-backed companies said on Monday.

For decades, payments firms existed as a backwater in the banking landscape. Usually set up by banks, they enjoyed a cosy relationship with them as customers but had few funds at their disposal to invest in technology.

As well as investing in innovation, payments companies now also need scale to navigate increasing regulatory complexity, which has been a driver for M&A activity in the sector.

As part of the deal, Concardis’ private equity owners - Bain and Advent - will receive Nets shares for their holdings in Concardis, while Hellman & Friedman’s Nets shareholdings will be diluted.

Both Concardis and Nets were only acquired by the private equity groups last year.

Concardis was valued at about 700 million euros in the January 2017 deal, sources close to the matter said at the time, while Hellman & Friedman announced the acquisition of Nets for 33.1 billion Danish crowns ($5.22 billion) in September.

In other recent deals, Worldline bought Swiss peer SIX Payment Services in May, a target which Nets had also vied for.

($1 = 6.3436 Danish crowns)

$1 = 0.8524 euros Reporting by Arno Schuetze Editing by Maria Sheahan

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