Worldline - Sale of TSS activities to Apollo Funds
Sale of TSS
activities to Apollo
Funds
Worldline received a binding
offer by Apollo
Funds,retained by the Board, and
comprising:Total consideration at current fair
value of € 2.3 billion
€ 1.7 billion
upfront, andup to
€ 0.9 billion in
preferred sharesClosing expected in H2
2022
Paris La Défense, February
21, 2022 – Worldline
[Euronext: WLN], a leader in the payments
industry, has entered into exclusive talks
with the Apollo
Funds (as defined below) on the basis of a
binding offer for the purchase of its Terminals, Solutions &
Services (“TSS”) Business Line.
Following the strategic review of TSS aimed at
supporting its ongoing transformation and further accelerating its
development, Worldline has entered into exclusive talks with the
investment funds managed by affiliates of Apollo (NYSE: APO) (the
“Apollo Funds”) upon receipt of a binding offer, for 100% of the
shares of TSS, comprising a € 1.7 billion upfront
consideration as well as preferred shares that could reach up to
€ 0.9 billion in value depending of the future value
creation of TSS.
Worldline has entered into exclusive talks with
Apollo Funds following a competitive process considering the
overall quality of its offer, its strategic vision and industrial
focus, its commitment to support the current TSS management and its
sensitivity towards the French social context. Moreover, Apollo has
a strong track-record in value creation and corporate carve-outs,
with successful transformation of previously acquired businesses in
France. The contemplated transaction also encompasses the signing
of a partnership agreement cementing the strategic and long-term
commercial relationship between Worldline and TSS over the next 5
years.
Alongside the Apollo Funds, Worldline will
remain associated to future value creation opportunities made
possible by the robustness and quality of the TSS business and the
transformation plan shared between the parties via the ownership of
the preferred shares. This structure has been designed to align
interests between Worldline and the Apollo Funds and will be
directly linked to the total value creation achieved by TSS during
its ownership by the Apollo Funds.
Gilles Grapinet, CEO of
Worldline, said: “I am very happy to announce today that
we’ve signed an agreement to enter into exclusive talks with
Apollo, a highly renowned and successful global investment firm,
that offers to take-over the future development of our payment
terminal activity and its teams. As we communicated at the time of
the acquisition of Ingenico in February 2020, we initiated a
strategic review of our payment terminals business to ensure that
it would have the best possible conditions to execute its ambitious
transformation. Following the validation of Worldline’s Board of
Directors to divest TSS in October 2021 and after conducting a
rigorous process over several months, we have signed an agreement
with the candidate we believe is the best fit to ensure the
takeover of the business, in the best interest of its customers and
employees. The TSS business, world leader in its space, has a very
promising development potential and is supported by highly talented
people under the strong leadership of Matthieu Destot. We trust
Apollo can provide TSS with the best assets, expertise and support
to ensure the pursuit of its successfully initiated transformation
journey towards an “as-a-service” business model, reinforcing
further its long-term success.This announcement is a major
milestone in the execution of Worldline’s strategy after the
acquisition of Ingenico and numerous new acquisitions in 2021 in
Greece, Italy and Sweden, strengthening its leadership position in
payment services. This contemplated transaction, while being
fundamentally triggered by the best interest of TSS, will also
simplify our group structure, further increase our focus on our
core activities and massively deleverage our balance sheet allowing
the acceleration of our next strategic developments towards
establishing Worldline as a truly global Paytech leader.”
Michele Raba, Apollo Partner,
said: “TSS is the leading hardware player in the payments
infrastructure ecosystem with a strong Ingenico brand and leading
market shares across all regions of operations. We are excited
about partnering with TSS’s management team to continue growing TSS
in hardware, software, and services areas where there is already
strong momentum. We look forward to supporting TSS in its next
phase of business transformation and becoming the ecosystem enabler
in the new world of payments acceptance globally. Worldline will
remain a key customer for TSS and an important partner in this
strategic journey.”
Matthieu
Destot, head of TSS global business
line, said: “We, as the TSS management team and all the
TSS talents across the world, are thrilled by this announcement
which is opening an exciting new era for our Terminals, Solutions
and Services activities as an independent company under the
Ingenico brand. This operation marks a key milestone to accelerate
the current dynamic in our already well engaged business
transformation journey. From a predominantly hardware and
associated services business to becoming the ecosystem enabler in
the new world of payments acceptance, with a greater mix of
software and cloud-based services, leveraging our latest range of
Android OS-based platform (AxiumTM), our Terminal as a Service
(TaaS) offering and our Payments Platform as a Service (PPaaSTM)
platform.Apollo’s track record in investing in the business
transformation of such a fast growing technology company, our
worldwide leading position with an undisputed installed base of
points of payments acceptance to transform and now, the new
investments capabilities to capture the omni channel commerce
services based on our promising POS payments orchestration
platform, will allow us to create even more value to our Banks,
Acquirers, ISVs, Value-Added Service Providers and Fintech
customers and partners, for our new shareholder, Apollo, and for
our talented teams.”
Based on the current valuation of the preferred
shares, the total consideration amounts to € 2.3 billion
at the time of the transaction announcement. The fair value of the
preferred shares, estimated using a Black and Scholes model, will
be accounted for € 0.6 billion on Worldline’s balance sheet,
as discussed with Worldline’s auditors as part of the preparation
of the 2021 financial statements. The fair value of the preferred
shares upon completion is expected to correspond to the c.80%
achievement level of TSS business plan and would reach its full
value of € 0.9 billion if c.90% of TSS business plan is delivered,
assuming limited valuation multiple re-rating at exit. The main
impact of the disposal on Worldline’s discontinued part of its
financial statements will consist in a conservative non-cash
technical impairment of c.€900m compared to TSS book value defined
at Ingenico closing, pre-Covid components shortage crisis.
This transaction is subject to the signing of a
final and definitive agreement between the parties and will be
carried-out in the framework of the relevant social processes and
ongoing dialogue with the employee representatives’ bodies. The
completion of the transaction is also subject to the approval of
relevant regulatory authorities and is expected to close in the
second half of 2022.
Latham & Watkins is serving as legal counsel
to Worldline. UBS Investment Bank and BNP Paribas are acting as
lead financial advisors to Worldline.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
and the French offices of Cleary, Gottlieb, Steen & Hamilton
LLP are serving as legal counsel to the Apollo Funds. HSBC is
acting as lead financial advisor, and Barclays and Societe Generale
as financial advisors to the Apollo Funds.
Forthcoming events
- February 22,
2022 FY 2021
results
- April 27,
2022 Q1
2022 revenue
- July 27,
2022 H1
2022 results
- October 25,
2022 Q3 2022
revenue
Worldline
Contacts
Investor Relations
Laurent Marie+33 7 84 50 18
90laurent.marie@worldline.com
Benoit d’Amécourt+33 6 75 51 41
47benoit.damecourt@worldline.com
Communication
Sandrine van der Ghinst+32 499 585
380sandrine.vanderghinst@worldline.com
Hélène Carlander+33 7 72 25 96
04helene.carlander@worldline.com
Apollo Contacts
Investors
Noah Gunn, Global Head of Investor Relations(212)
822-0540IR@apollo.com
Media
Joanna RoseGlobal Head of Corporate
Communications(212) 822-0491Communications@apollo.com
ABOUT
WORLDLINE
Worldline [Euronext: WLN] is the European leader
in the payments and transactional services industry and #4 player
worldwide. With its global reach and its commitment to innovation,
Worldline is the technology partner of choice for merchants, banks
and third-party acquirers as well as public transport operators,
government agencies and industrial companies in all sectors.
Powered by over 20,000 employees in more than 50 countries,
Worldline provides its clients with sustainable, trusted and secure
solutions across the payment value chain, fostering their business
growth wherever they are. Services offered by Worldline in the
areas of Merchant Services; Terminals, Solutions & Services;
Financial Services and Mobility & e-Transactional Services
include domestic and cross-border commercial acquiring, both
in-store and online, highly secure payment transaction processing,
a broad portfolio of payment terminals as well as e-ticketing and
digital services in the industrial environment. In 2020 Worldline
generated a proforma revenue of 4.8 billion euros.
worldline.com
Worldline’s corporate purpose (“raison d’être”)
is to design and operate leading digital payment and transactional
solutions that enable sustainable economic growth and reinforce
trust and security in our societies. Worldline makes them
environmentally friendly, widely accessible, and supports social
transformation.
ABOUT APOLLO
Apollo is a global, high-growth alternative
asset manager. In the asset management business, Apollo seeks to
provide its clients excess return at every point along the
risk-reward spectrum from investment grade to private equity with a
focus on three business strategies: yield, hybrid, and equity. For
more than three decades, Apollo’s investing expertise across its
fully integrated platform has served the financial return needs of
its clients and provided businesses with innovative capital
solutions for growth. Through Athene, Apollo’s retirement services
business, it specializes in helping clients achieve financial
security by providing a suite of retirement savings products and
acting as a solutions provider to institutions. Apollo’s patient,
creative, and knowledgeable approach to investing aligns its
clients, businesses it invests in, its employees, and the
communities it impacts, to expand opportunity and achieve positive
outcomes. As of December 31, 2021, Apollo had approximately $498
billion of assets under management. To learn more, please visit
www.apollo.com.
Disclaimer
This document contains forward-looking
statements that involve risks and uncertainties, including
references, concerning the Group's expected growth and
profitability in the future which may significantly impact the
expected performance indicated in the forward-looking statements.
These risks and uncertainties are linked to factors out of the
control of the Company and not precisely estimated, such as market
conditions or competitors’ behaviors. Any forward-looking
statements made in this document are statements about Worldline’s
beliefs and expectations and should be evaluated as such.
Forward-looking statements include statements that may relate to
Worldline’s plans, objectives, strategies, goals, future events,
future revenues or synergies, or performance, and other information
that is not historical information. Actual events or results may
differ from those described in this document due to a number of
risks and uncertainties that are described within the 2020
Universal Registration Document filed with the French Autorité des
marchés financiers (AMF) on April 13, 2021 under the filling
number: D.21-0303 and its Amendment filed on July 29, 2021 under
the filling number: D. 21-0303-A01.
Revenue organic growth and Operating Margin
before Depreciation and Amortization (OMDA) improvement are
presented at constant scope and exchange rate. OMDA is presented as
defined in the 2020 Universal Registration Document. All amounts
are presented in € million without decimal. This may in certain
circumstances lead to non-material differences between the sum of
the figures and the subtotals that appear in the tables. 2021
objectives are expressed at constant scope and exchange rates and
according to Group’s accounting standards.
Worldline does not undertake, and specifically
disclaims, any obligation or responsibility to update or amend any
of the information above except as otherwise required by law.
This document is disseminated for information
purposes only and does not constitute an offer to purchase, or a
solicitation of an offer to sell, any securities in the United
States or any other jurisdiction. Securities may not be offered or
sold in the United States unless they have been registered under
the U.S. Securities Act of 1933, as amended (the “U.S. Securities
Act”) or the securities laws of any U.S. state, or are exempt from
registration. The securities that may be offered in any transaction
have not been and will not be registered under the U.S. Securities
Act or the securities laws of any U.S. state and Worldline does not
intend to make a public offering of any such securities in the
United States.
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