Pitch Best Mid Cap Deal 2023: European Payments Initiative acquires iDEAL and Payconiq

Stem op deze deal via de stempagina: Mena.nl/genomineerden-best-mid-cap-deal-2023

Name of the deal: European Payments Initiative’s simultaneous acquisition of the leading Dutch payment service Currence iDEAL and its account-to-account payments technology supplier Payconiq International
Date announced: 25-04-2023
Date closed: The transaction is subject to approval by the relevant national and European authorities.
Published value: € 50 – 100 million
Buyer(s): European Payments Initiative
Target(s): Payconiq International, Currence iDEAL
Seller: KBC Group, Belfius, ING, Rabobank, ABN AMRO

Involved firms and advisors

Involved firms and advisors buy side:
Legal advisor: Allen & Overy
Tax advisor: Allen & Overy, Mazars
Strategic advisor: Oliver Wyman

Involved firms and advisors target:
Legal advisor: HVG Law
Financial DD advisor: BDO
Tax advisor: BDO 

Involved firms and advisors sell side:
Financial advisors: ABN AMRO Bank, ING Bank, Rabobank, KBC
Legal advisors: Clifford Chance, Linklaters
Tax advisor: Clifford Chance 

Pitch

Brief description deal / Deal outline
European Payments Initiative (EPI), a pan-European and Brussels-based payment scheme initiative backed by several major banks, has acquired Currence iDEAL, a Dutch online payment system, and Payconiq International, a Luxembourg-based payment solutions provider. EPI, iDEAL and Payconiq International will join forces to realise EPI’s vision to set up a new, innovative and unified payment solution for Europe. With the acquisition of the 2 companies, 4 new shareholders become part of EPI. Belfius and DZ Bank, who joined at the end of 2022, and ABN Amro and Rabobank, two more major Dutch banks, are now coming on board alongside existing Dutch shareholder ING.

Why should this deal win the Award for Best Deal Mid-Cap 2022?
European Payments Initiative (‘EPI’)’s simultaneous acquisition of the leading Dutch payment service Currence iDEAL (‘iDEAL’) and its account-to-account payments technology supplier Payconiq International (‘PQI’) should be recognized as one of the most complex, innovative and impactful transactions on the European market this year. EPI is acquiring iDEAL from its shareholders ABN AMRO Bank, ING Bank, and Rabobank and PQI from its shareholders Belfius, ING Bank, KBC and Rabobank. This acquisition is expected to give EPI an enormous acceleration towards realizing its ambition to create of a new, innovative and unified payment solution for Europe that is envisaged to facilitate payments for millions of users in Europe.

This move aims to consolidate various local payment systems under one unified brand, simplifying transactions and reducing reliance on foreign solutions. The deal involves a large number of parties, including sixteen major European Banks.

Deal rationale:
EPI was launched in 2020 by a group of fourteen commercial banks and partners from the Netherlands, Belgium, Germany and France to create a new instant payment solution. The European Commission-backed initiative aims to become a new pan-European standard for payments in a market currently dominated by a few international and mostly non-European players. This solution is therefore built for Europe and by European payment industry leaders. EPI, iDEAL and PQI will hence join forces to realise EPI’s vision to set up a new, innovative and unified payment solution for Europe. Martina Weimert, CEO of EPI states [1]: “We are developing a new, scalable platform to address the modern and evolving payment needs of European consumers and merchants in the best possible way, with efficient, state-of-the-art technology.” EPI’s ambitious plans for a European ‘home grown’, all-in-one digital wallet and payment solution, which focuses on a peer-to-peer and a peer-to-pro (ecommerce) solution, is set to give an important impetus to Europe’s position as a global leader in payment innovations. EPI will leverage PQI and iDEAL’s strong operational experience and know-how in local markets as it builds the new, scalable pan-European platform. The digital wallet with P2P payment functionality is planned to be launched commercially by the end of 2023, initially covering three countries: Belgium, France and Germany. Those three geographies together represent more than half of all retail payments in the EU. The solution currently provided by iDEAL will be migrated to the new platform over time.

[1] https://www.epicompany.eu/epi-company-announces-acquisitions-additional-shareholders-and-the-coming-launch-of-its-new-instant-payment-solution/

What is the impact of this deal for the company?
As a result of the transaction, EPI’s shareholders – BFCM, BNP Paribas, BPCE, Crédit Agricole, Deutsche Bank, DSGV, ING, KBC, La Banque Postale, Nexi, Société Générale and Worldline – welcome four new shareholders: Belfius and DZ Bank, who joined at the end of 2022, and ABN AMRO and Rabobank, two more major Dutch banks, who are now coming on board alongside existing Dutch shareholder ING. As a result, the new combination will have sixteen shareholders. iDEAL and PQI will become part of the EPI group.

What is the impact of this deal for the direct stakeholders?
EPI aims to develop a new, scalable platform to address the modern and evolving payment needs of European consumers and merchants in the best possible way, with efficient, state-of-the-art technology. To realise its vision, EPI will leverage the strong operational experience, know-how and local market knowledge of iDEAL and PQI. EPI will enable European banks and acquirers to joinforces, delivering greater efficiency and value for customers through direct and instant payments between bank accounts.

Currence CEO Daniël van Delft says [2]: “We are expanding to continue to match the shopping and payment behavior of consumers and the wishes of entrepreneurs. The new iDEAL is all about convenience for consumers and the ability to shape their own payment process. With this acquisition, iDEAL’s position becomes even stronger.”

For the time being, nothing is expected to change for Dutch users of iDEAL – only when the solution currently provided by iDEAL is ready to be migrated on to the new EPI platform.

[2] https://mena.nl/artikel/epi-european-payments-initiative-neemt-ideal-over/

What is the impact of this deal on society?
EPI is positioning itself as the common solution and innovation platform of the European payment ecosystem. It will serve as a foundation for the fulfilment of the European Commission’s and European Central Bank/Eurosystem’s pan-European retail payments strategy and a further catalyst to enhance Europe’s position as a global leader in payment innovation. With a European standard for digital payments, innovation is easier, and competition with international giants such as Apple and Google is also expected to be better tackled.

What was most complex about this deal?
Managing two simultaneous transactions with many different workstreams tied-in to each other, with a large number of parties and stakeholders involved, in a regulated environment made this a highly complex transaction. This deal required us to work in cross-border and multidisciplinary teams, and to tap into our broad expertise advising on complex and innovative transactions in the financial institutions and payment services sector, involving not only M&A advice, but also advice on regulatory and competition matters, IT/IP and transitional services.