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France’s Edenred to boost earnings with planned acquisition of US-based CSI
Posted on Friday, 09 November 2018 12:57
French transactional services business Edenred is paying USD 600.00 million in a bid to boost its overall earnings with an agreement to acquire North American automated corporate payment software group Corporate Spending Innovations (CSI).
The deal comes after a two-year partnership deal between the two parties and will put the European acquiror in a better position to expand market opportunities, as well as to increase its development in the industry.
Edenred is also looking to boost its digital payment technology platform, while growing its presence in North America, where the sector is said to be worth USD 25,000 billion, or roughly 25.0 per cent of the world’s corporate payment services.
The market is undergoing a fast-paced digitalisation, as cash and cheques represent close to two-thirds of all business-to-business expenses in the region.
Such processes a reliable on manual and paper-based products being available, giving a lack of visibility and a risk of fraud.
Edenred plans to use CSI to help get more businesses using digital payment options, while achieving annual revenue growth of around 20.0 per cent over the next few years.
The deal is expected to complete in early 2019 and is subject to approval from the relevant competition authorities.
CSI provides a payment automation platform that simplifies and streamlines the management of the entire accounts payable process.
It covers various payment methods including Mastercard and Visa, procurement cards and checks.
CSI is expected to boost Edenred’s earnings before interest and taxes from 2019 and net profit from 2020.
The acquiror was in talks to buy a stake in Ingenico, a French electronic payment terminals software provider; however, the company has decided against this deal.
Reuters picked up on the news, saying the payments industry has been undergoing technological changes due to new consumer habits, including the use of smartphones.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 248 deals targeting companies with financial transactions processing, reserve and clearinghouse activities announced worldwide since the start of 2018.
The largest of these was worth USD 4.90 billion and involves Verscend Technologies acquiring US-based healthcare payments processor Cotiviti Holdings.
Switzerland’s SIX Payment Services, Sweden-headquartered iZettle and Cayman Islands-incorporated PagSeguro Digital.
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