The completion of the strategic agreement Alpha Bank – Nexi is in the final stretch

Alpha Bank announced today the signing of a binding agreement with Nexi SpA for the strategic cooperation in the field of card acceptance and settlement of transactions in Greece, following the preparation of a Memorandum of Cooperation in August 2021.

THE transaction provides for secession and transfer (“carve out”) of the activity of the Card Acceptance and Transaction Clearing Sector by Alpha Bank to a newly established company (“New Company”), the sale to Nexi of 51% of the New Company and the conclusion by the parties of a long-term promotion and distribution contract.

The agreed Business Value of the Transaction was set at the amount of Euro 307 million for 100% of Alpha Bank’s Card Acceptance and Transaction Clearing Sector.

In addition, an additional price of up to Euro 60 million was agreed (for 100% of Alpha Bank’s Card Acceptance and Transaction Clearing Division) in the form of additional earnings (earn-outs) payable up to the fourth year of operation of the New Company.

The New Company is expected to contribute over 150,000 POS terminals, with a volume of Euro 9 billion and is expected to generate approximately Euro 93 million and Euro 18 million in revenue and EBITDA, respectively, in 2022, on a pro-forma basis.

The agreement with Nexi, in addition to the Euro 307 million profit (as revenue and valuation) and the Euro 60 million earn-outs, will also bring further cost reduction, sending another message to the markets for consistent implementation of the Bank’s plan to improve profitability ratios.

Advanced solutions for Greek companies

At the same time, all the necessary actions for the creation of the new company have been planned and are being implemented.

In a very short period of time, the entire contractual framework of the agreement was completed, while the new organizational structure, the initial staffing of the company as well as the business plan are being prepared.

In the following days, an application for a license as a Payment Institution is submitted to the Bank of Greece, while the negotiations with the Card Schemes have begun. Utilizing the experience and know-how of the largest payment provider in Europe, the goal is the immediate upgrade of payment systems, in order to offer new reliable and innovative omnichannel solutions, with smart terminals connected to the merchant’s cash register and advanced analytics services for all companies cooperating with the Bank.

Alpha Bank’s Card Acceptance and Transaction Division holds the first place in the Greek market and is the only one that provides acceptance for all card programs. In addition, it utilizes a diversified portfolio of top-level merchants, operating in the highly lucrative tourism and hospitality sectors, and is therefore in the best position to benefit from the strong recovery in travel volume following the Covid-19 pandemic.

Alpha announcement:

Alpha Services and Holdings SA, 100% parent company of Alpha Bank SA, announces the conclusion of a binding agreement for the creation of a strategic cooperation in the field of card acceptance and settlement of transactions in Greece [11.11.2021]

Following the preparation of a Memorandum of Cooperation in August 2021, Alpha Services and Holdings SA announces that Alfa Bank SA (“Alpha Bank”) entered into a binding agreement with Nexi SpA (“Nexi”) for the establishment of a strategic cooperation in the field of card acceptance and settlement of Alpha Bank in Greece (the “Card Acceptance and Transaction Clearing Division”) through, including: (i) the transfer of the activity of the Card Acceptance and Transaction Clearing Division from Alpha Bank by a spin-off to a newly established company (the “New Company”), (ii) the sale to Nexi of 51% of the New Company, under the condition for the fulfillment of certain deferrals, and (iii) the conclusion by the parties of a long-term promotion and distribution agreement, which will provide the New Company with access to the Alpha Bank network, for the purpose of distributing card acceptance products and providing services to business customers of Alpha Bank in Greece (the “Transaction”).

The agreed Business Value (EA) of the Transaction was set at the amount of Euro 307 million for 100% of the Card Acceptance and Transaction Clearing Division of Alpha Bank. An additional price of up to Euro 60 million was agreed (for 100% of the EA of Alpha Bank’s Card Acceptance and Transaction Division) in the form of additional returns (earn-outs) payable up to the fourth year of operation of the New Company under the deferred condition of achieving certain economic goals.

The completion of the Transaction is subject to the fulfillment of certain deferrals (including obtaining supervisory licenses and approvals under current legislation) and is expected to take place within the first half of 2022.