The mega mergers aren’t over yet. In a global move with potentially major implications for the U.S. market, Ingenico Group S.A. said it has agreed to be acquired by Worldline S.A. for cash and stock consideration totaling approximately $8.6 billion.
The transaction, expected to close in the third quarter, brings together two French companies with far-reaching stakes in the electronic payments business. Ingenico is a principal supplier of point-of-sale terminals in North America and other regions that has in recent years expanded its reach in e-commerce transaction processing. Its worldwide terminal base totals 30 million, accounting for a 37% share of installations, Ingenico says. It processes for 550,000 merchants either online or in-store, or both, across 170 countries.
With major assets in North America, Ingenico offers Worldline “a footprint in the U.S. market,” notes Jared Drieling, senior director of consulting and market intelligence at The Strawhecker Group, an Omaha, Neb.-based payments consultancy. That footprint could expand quickly. While the combined Worldline-Ingenico is likely to have a more immediate impact in Europe, it also sets up the newly expanded company to exploit hardware and online-processing capabilities in other regions, Drieling says. “It’s a pretty big deal from an international standpoint. However, they do have their sights set on North America,” he adds.
Drieling sees the merger as a “scale play,” at least partly in reaction to a trio of huge U.S. processor mergers that sent ripple effects last year far beyond American borders. These combinations included Fiserv Inc.’s acquisition of First Data Corp., Fidelity National Information Services Inc.’s deal for Worldpay Inc., and Global Payments Inc.’s merger with Total System Services Inc.
The combination will produce a company with $5.85 billion in annual revenue, of which $2.76 billion comes from merchant services. Ingenico shareholders will own approximately 35% of the combined company, with Worldline shareholders owning the remaining 65%, according to an announcement from the companies.