Alpha Bank and Nexi have announced a long-term commercial agreement to establish a marketing and distribution strategic partnership, enabling Alpha Bank, through its widespread network of over 300 branches across Greece, to promote and distribute to its customers Nexi-developed technological and innovative solutions.
As part of the Transaction, Alpha Bank will carve out its merchant acquiring business unit into a “NewCo” and all required actions will be taken in order for the NewCo to receive a payment institution licence.
Subsequently, Nexi will acquire a 51% stake in the NewCo. Alpha Bank is committed to the payments sector and intends to become a strategic partner of Nexi in Greece, while also being the exclusive distributor for NewCo’s products and services.
The total upfront consideration corresponds to an EV for 100% of Alpha Bank’s merchant acquiring business unit equal to €307 million, subject to customary adjustments as of the date of completion of the Transaction.
The consideration can be increased by up to €60 million (for 100% EV of Alpha Bank’s merchant acquiring business unit) in the form of earn-outs, payable by the fourth year of operations of NewCo and subject to the achievement of certain financial targets to be agreed between Alpha Bank and Nexi.
In exchange for the access to its Network, Alpha Bank will receive referral fees from the NewCo, further supporting the Bank’s fee & commission income over time. The Transaction forms part of Alpha Bank’s announced business plan, “Project Tomorrow”, and is expected to contribute in excess of ca. 40 bps to Alpha Bank’s Common Equity Tier I as of 31 March 2021.
Following completion of the Transaction, Nexi will consolidate the NewCo, which is expected to contribute over 150,000 POS terminals and €9 billion of volumes. NewCo is expected to generate approximately €93 million and €18 million of revenues and EBITDA respectively in 2022, on a pro-forma basis and pre-synergies.
Nexi will finance the Transaction entirely through existing cash resources. Through this Transaction, which is consistent with its strategic vision, Nexi establishes a market-leading position in the fast-growing Greek payments market, further expanding its merchant acquiring operations, while increasing revenue diversification across highly attractive and underpenetrated European countries.
“The partnership with Nexi is another major step in Alpha Bank’s ambition to form strategic alliances with the best global partners so as to provide solutions of the highest quality to our customers,” comments Vassilios Psaltis, CEO of Alpha Bank.
The Transaction is expected to close in Q1 2022, subject to Nexi and Alpha Bank agreeing upon and finalizing the long-form contractual documentation of the Transaction and obtaining all applicable corporate and regulatory approvals and consents.
 Due to insourcing of NewCo costs incurred vs. third party providers
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