The leading paytech company in Italy raises EUR 2 billion in IPO

Italian payments group Nexi has priced what is set to be one of Europe’s biggest initial public offerings this year at 9 euros per share, valuing the group’s equity at 5.7 billion euros (£4.9 billion).  The IPO will raise total proceeds of about 2 billion euros before the overallotment, including 684 million euros in fresh capital which is to be used to cut and refinance Nexi’s debt.

The offer drew 5.4 billion euros in demand from more than 340 investors across the world, Nexi said. BofA Merrill Lynch, Banca IMI, Credit Suisse, Goldman Sachs and Mediobanca acted as joint global coordinators and bookrunners in the deal.

Nexi said in a statement on Friday the deal valued the company at 7.3 billion euros including debt, the equivalent of 17.2 times its core earnings. That is roughly in line with average industry valuations, according to one analyst’s report.

It plans to float 35.6 percent of the company on the market, rising to 40.9 percent if an overallotment option is exercised, according to Reuters.

Italian payments firm Nexi began proceedings on March 17, 2019 for an initial public offering on the Milan stock exchange.  Nexi said in a statement it had filed a request to list to the Milan’s stock exchange, and the offer was expected to be launched in April.

Nexi shares are due to start trading in Milan on Tuesday.

Once a backwater of banking, the payment processing sector is now regarded as one of the most lucrative and fast-growing businesses in the financial sector, though it also faces competition from newcomers trying to disrupt the way merchants are paid.

Proceeds of the IPO will be used to reduce Nexi’s debt, with the aim of bringing net financial debt to 3-3.5 times normalized core earnings at the end of 2019, it said.

Nexi is the leading PayTech company in Italy which operates in strong partnership with ~150 partner banks covering 80% of the system in Italy in number of branches. Nexi’s integrated end-to-end omni-channel technology connects banks, merchants and consumers enabling digital payments.

Nexi, which runs electronic payments for credit card operator CartaSi, was taken over by private equity funds Bain Capital, Advent International and Clessidra at the end of 2015.

The fast-growing payments business faces competition from newcomers tapping technologies for alternative payment methods. In Italy, only 14 percent of purchases are cashless compared with more than half in the Netherlands, according to data from research house Ambrosetti.

Nexi operates in three market areas:
. Merchant Services & Solutions: Nexi, together with its partner Banks, serves c.890,000 merchants and manages 1.4 million POS terminals;
. Cards & Digital Payments: Nexi, together with its partner Banks, manages 41 million payment cards for c.30 million cardholders;
. Digital Banking Solutions: Nexi manages 13,500 ATMs, approximately 420,000 corporate banking workstations and completed over 900 million clearing transactions in 2018. In addition, Nexi is developing the open banking system in collaboration with the CBI consortium.

NEXI at a glance