M&A deal of the month: Nets acquires Polskie ePlatnosci

M&A deal of the month: Nets acquires Polskie ePlatnosci

Volker Schloenvoigt
April 6, 2020

It has been a strange few weeks and we are certain that M&A activity in payments will not be at the centre of what we all think and worry about these days. It is way too early to see how the current crisis will impact overall M&A activity going forward. Will the deal frenzy subside? Will funding for fintechs reduce or be channelled more towards digital-only players or consumer / SME lending propositions? Will there be more renegotiations of existing deals (like the acquisition of Prepaid Financial Services by EML)? Will there be further need for mega-deals such as the one with Worldline and Ingenico? Time will tell but let’s look first at an interesting pre-crisis deal announced during the last month.

Nets, one of the largest payment players in Europe announced the acquisition of Polski ePlatnosci (PeP), a merchant acquirer in Poland that supports 125,000 POS terminals in the market and will contribute €55m in revenues to Nets once fully integrated. Poland’s acquiring market has a history of attracting foreign investment that goes back more than 15 years when Nova Corporation (later rebranded to Elavon) made its first acquisition in the market before First Data took over Polcard in 2007.

Various players from the German-speaking DACH region also entered Poland, in some cases forming JVs. Market interest was fuelled by the fact that Poland is a significantly bigger payments market than all the countries to its east or south offering rich promises to the largest players in the market. Today, Poland is also a technologically advanced payment market that adopted contactless technology earlier and quicker than many other European markets; there is also Blik, a mobile payment method that is supported by many Polish banks, facilitating POS as well as P2P payments and is used by millions of Polish citizens.

This €400m acquisition makes perfect sense for Nets. A company that dwarfs any other payment player in the Nordics, a region where electronic payments have advanced that far that growth potentials might be more limited, needs to look for outside opportunities. It has already a history of expanding its non-Scandinavian footprint in close proximity, namely the Baltics and Poland. In early 2019, Nets acquired dotpay in Poland and integrated it together with Przelewy24, in an e-commerce focussed business in which it owned a majority stake. The combination of that group with PeP will enable Nets to offer a truly omnichannel acquiring proposition in a market that, despite all its technological advancements, still sees a large share of retail cash transactions that will eventually convert towards cards or other electronic payment means. It is a safe bet and a deal that will provide value while expanding its European footprint.

The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).

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