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Worldline to acquire Greek network services provider Cardlink

Source: Worldline

Worldline, a global leader in the payments industry, today announced the signing of a bidding agreement for the acquisition of 92.5% of the share capital of Cardlink, the leading Network Services Provider in Greece.

Gilles Grapinet, Worldline’s Chairman and CEO, said: “The acquisition of Cardlink is a significant development in our Group consolidation strategy in Europe, extending our merchant services activities towards the South of Europe. Thanks to this transaction, we indeed benefit from a leading network services provider position in the fast-growing Greek market, driven by the ongoing adoption of electronic payments. This transaction offers attractive development opportunities for Worldline in the coming years and a strong footprint to further expand Cardlink presence in Greece.

We are extremely happy to welcome soon circa 110 new Worldline’s colleagues, managers, and payment experts, led by George Drimiotis, Cardlink CEO who will remain shareholder of Cardlink alongside Worldline and will be in charge, within our Group, of pursuing the fast development of our business in Greece with the full support of our Merchant Services organization.

As the European leader in payments, we keep executing our strategic roadmap with a focus on value-creative consolidation opportunities to enhance Worldline scale, reach and direct presence in a growing number of countries."

George Drimiotis, Cardlink’s CEO, said: “This is a very important day for our company. We are very excited to become part of the Worldline Group. This development will strengthen our positioning in the Greek market as the leading player in the evolution of the payments business and give us access to products and services that will enhance our offering and deliver more value to our merchant and bank customers."

Greece: an attractive payment market

With a cash penetration that remains high and a card transaction rate per capita more than twice below European countries average, the Greek market shows attractive growth opportunities with a growing addressable market driven by the shift from cash to card and electronic payment adoption. These favorable dynamics will continue thanks to strong underlying trends such as a positive macroeconomic environment (GDP growth, drop in unemployment, and regulations encouraging electronic payment), PSD2, open banking development (Banks connection to large ecosystems through APIs), and evolution of payment product offering (integrated POS, e-invoicing or advanced analytics).

Furthermore, the online and e-commerce development offers a strong growth potential with increased internet access for citizens over the past five years, rapidly transforming consumer behavior towards digital economy and online shopping becoming a standard in consumer habits, further boosted by Covid-19 related lockdowns.

As an additional very compelling characteristic, it is reminded that tourism is one of the most important sectors of the Greek economy and a key pillar of its economic growth. With more than 34 million tourists in 2019, Greece has established itself as one of the most visited countries in Europe and in the world for years. This represents a very attractive feature of the Greek payment market offering numerous additional growth opportunities in a post-Covid context by leveraging the very rich Worldline portfolio of travel and hospitality solutions.

Acquisition of Cardlink, the leading Network Services Provider

Founded in 2004, Cardlink is the leading Greek Network Services Provider (NSP) with an above 240,000 POS fleet (46% of POS transactions), managing c. 500 million of transactions a year (53% MSV market share). The company also provides more than 10,000 online merchants with strong value-added services through the Cardlink check-out offering.

Cardlink is a well-recognized and regarded payment acceptance leader in Greece with:
• The largest multi-acquiring POS platform acceptance network;
• A long-term relationship with major systemic banks in Greece among which Alpha Bank and Eurobank, and;
• A strong and experienced management team.

Strategic rationale

In this rapidly changing industry, driven by the customers’ adoption of numerous and innovative payment methods, Cardlink is the ideal cornerstone to leverage Worldline payment offering and value-added services capabilities in order to provide the best customer proposition and user experience across all segments in Greece.

The leading position of Cardlink coupled with Worldline’s global scale, best-in-class technologies, and payment expertise will allow the entity to grow revenue at a double-digit rate in the coming years. This accelerated growth rate will be delivered through POS acceptance deployment (white labels and Android offering), platform and processing leverage with main Greek banks, value-added services offering enlargement (analytics, loyalty, wallets), and one-stop-shop offering implementation (payment aggregator go-to-market).

This acquisition represents a privileged opportunity for Worldline to strongly expand its Merchant Services activities in this attractive European market. Worldline intends to further develop the longstanding partnerships of Cardlink with key local acquiring banks which are benefitting from its leading POS acceptance capabilities, its direct access to an existing and high-quality merchants’ portfolio, while generating significant growth opportunities fueled by increasing card penetration and online capabilities.

Furthermore, a robust integration and development program will be implemented at closing to further improve profitability rate through operating leverage and costs efficiency.

Impacts of the transaction on Worldline

The key financial impacts of the newly acquired entity on Worldline are the following:
• Additional annual revenue of c. € 40 million at closing with expected double-digit organic growth CAGR over the next 4 years;
• OMDA margin of c. 35% expected at closing with upside potential driven by revenue growth and operating leverage;
• Estimated cash-out of c. € 130 million at closing (for 92.5% ownership), preserving Worldline’s financial flexibility and based on an c.11x EV/2020 OMDA multiple;
• Investment of the CEO that will keep a 7.5% ownership in Cardlink;
• Customary minority buy-back mechanism through a call option exercisable by Worldline (5 years after closing), and;
• Closing expected in H2 2021, subjected to satisfaction of customary condition precedent.

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