
Deal in Focus: Nordic Capital sells Bambora to Ingenico for €1.5bn

Nordic Capital has sold electronic payment service provider Bambora to Ingenico Group for an enterprise value of €1.5bn.
This is a 5x return on Nordic Capital's original investment, according to a source close to the situation.
The divestment was made from the GP's €3.5bn buyout vehicle, Nordic Capital Fund VIII, which held a final close in December 2013 and was 62% invested as of March 2017, according to unquote" data.
Founded in 2015, Bambora is a multi-channel electronic payment software developer based in Stockholm. It has a range of applications that support online, in-store and in-app purchases. Bambora now manages €55bn of transactions per year and thereby generated a revenue of €202m for 2016. It gained 15,000 new customers in the first half of 2017 and currently employs around 700 people.
The sale marks the end of a buy-and-build strategy that started in May 2014 with the buyout of Swedish payments business Euroline for €243m. Euroline acted as the engine for further acquisitions in the space.
In September 2014, Nordic Capital acquired Samport Payment Services as a bolt-on for Euroline. Then in December of the same year it acquired Mobile Payment Solutions from Industrifonden and other investors. In February 2015, Danish payment provider DK Online joined the group along with Epay in April. In total twelve bolt-on transactions have been completed since the original buyout of Euroline.
Growth was not exclusively acquisitive though, with Nordic installing a new management team and employing an extra 400 people. The company projects 20% revenue growth and 30% EBITDA growth over the next two years.
Acquirer Ingenico Group has said that the financial leverage will remain below 3x EBITDA, leaving Ingenico flexibility for future M&A. Bambora is currently adding 3,000 new small and medium enterprises to its client list every month. Nordic Capital's Fredrik Näslund thinks this is due to the way technology has been integrated into the business: "Bambora is in a very strong position. It offers an omnichannel one-stop payment service, which very few of its competitors are doing."
Off-market
When it came to selling the business there was no need for a bank-led auction process, according to Näslund. "Nordic Capital has had a number of inbounds over the years but in the end it was Ingenico that really wanted to get hold of the technology, the culture and people at Bambora," he says.
Ingenico approached the company early and established relationships across a number of channels. "Ingenico is well known to the management team, they have had a good B2B relationship whereby Bambora managed some clients for Ingenico in the past two years," Näslund explains. Bambora's management will stay on and will be reinvesting a "meaningful" portion of their proceeds from the sale into Ingenico shares.
The acquirer sees the purchase as a key milestone in the execution of its payments strategy. Specifically, it adds a direct small and medium-sized business sales channel, adds cross-border capabilities and increases its global footprint, particularly in Australia. Ingenico is now the largest payment acceptance network in the world, generating €2.3bn revenues in 2016.
People
Nordic Capital - Fredrik Näslund (partner).
Ingenico Group – Philippe Lazare (CEO).
Bambora - Johan Tjärnberg (CEO).
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