The pandemic’s impact on M&A activity continues with Q3 2020 deal value in the global payments sector dropping to US$3.1b from US$3.5b last quarter and median EBITDA multiple for all disclosed deals year-to-date down to 18.3x in YTD’2020, from 21.8x in 2019. However, we expect activity to strengthen, as companies pursue synergies and build scale.
Investment in Spanish payment processor dominates the quarter
Almost two-thirds of this quarter’s total deal value was contributed by one deal – Global Payments’ acquisition of a 29% stake in Comercia Global Payments from CaixaBank for a cash consideration of US$583m. The deal implies a valuation of US$2.0b for 100% of the Spain-based payment processing firm, which provides point-of-sale (POS) terminals, and payment gateways, as well as other POS-based services.
The deal will see CaixaBank maintain a presence and influence in the Spanish merchant acquiring market, while also generating a post-tax US$346.6m capital gain. The current commercial agreement between the Company and CaixaBank will extend until 2040 to facilitate product innovation, business growth, and to meet client expectations.