Apollo Global Management recently announced its offer to purchase Worldline’s terminal business for $2.3 billion. The deal will help Apollo expand its payment processing services and provide Worldline with new opportunities.
In this section, we’ll discuss the overview of the deal and what it means for the two companies.
Apollo Nears $2.3 Billion Deal for Worldline’s Terminal Business
Apollo Global Management, Inc. has announced plans to acquire Worldline SA’s terminal business for a total enterprise value of 2.3 billion Euros. This acquisition is part of Apollo’s ongoing strategy to expand internationally into payment and multi-channel commerce markets. It is expected to close in early 2021 once German antitrust regulators have reviewed it.
Together, the two companies’ expertise in integrated omnichannel solutions will enable merchants to offer seamless end-to-end customer experiences through multiple channels such as mobile, in-store, online, and connected digital ecosystems with analytics capabilities. With agreement on a basic understanding of the deal already established between the parties involved they now must negotiate final contract details including disclosure agreements and some minor financial commitments before closing.
The acquisition presents an excellent opportunity for Apollo due to Worldline’s high standards of service quality while providing Apollo with immediate access to over 50 countries around the globe through their current leader footprint in France, Germany and Southeast Europe. In terms of operation, it is proposed that after this deal goes through that Worldline will become a wholly owned subsidiary of Apollo Parent Holdings Ltd., however significant details are still under negotiation between both parties.
This agreement means that Apollo looks forward to joining forces with Worldline’s existing team led by Gilles Grapinet – CEO and Chairman – who will remain its chief executive officer following the closing of the transaction but will no longer be part of its board of directors; Jean Pascal Tricoire – President – who held onto the position for 11 years before leaving during late 2020; and Tess Vanlanten – CFO – who has been overseeing all financial operations since 2015 when she first joined on as an independent director.
What is Worldline’s Terminal Business
Worldline’s terminal business, valued at €2.3 billion ($2.7 billion), provides point-of-sale terminals to merchants for in-store and online payment processing services. These terminals are the primary means merchants accept customer payments within their store, typically through credit and debit card acceptance.
Worldline offers several different models of point-of-sale terminal hardware and various software applications and services that help merchants manage customer payments securely and efficiently.
In October 2019, Apollo Global Management LLC announced its plan to acquire certain assets from Worldline’s terminal business to create a new company that provides payment technology solutions worldwide for retail and food service markets. Under the terms of the deal, Apollo will pay approximately €2.3 billion ($2.7 billion) for the acquired assets, which includes Worldline’s point-of-sale terminal infrastructure operations located in Europe, Middle East, Africa (EMEA) region, together with select international assets located in North America and Latin America regions (NA/LA).
The transaction is expected to close before the middle of 2020, creating one of the world’s largest providers of point-of-sale technology solutions for payment processing.
Impact on the Global Payment Industry
The recently announced merger of Worldline and Apollo was recently seen as a game-changer in the global payment industry. The $2.3 billion deal secured by Apollo is expected to take the companies to the next level regarding payment processing technology and services.
As this industry is at the pinnacle of its growth, the potential of this merger to create disruption worldwide is undeniable.
This article explores the potential impact of this merger on the global payment industry.
What is the global payment industry
The global payment industry comprises the myriad companies and organizations that process, authorize, facilitate and record payments between customers, merchants, banks and businesses on a global level. Payment services range from credit card processing to logistics, remittances to online payment processing. The industry also encompasses a range of financial services such as cash withdrawals, currency exchange, and fraud prevention services.
The scope of the industry is vast with various providers specializing in various areas from face-to-face card acceptance to digital payments such as mobile money transfers and quick response codes for mobile-based payment systems (QR codes). However, generally speaking the global payment industry can be broken down into four essential components; infrastructure provider, merchant acquirer/processor/gateway (MPG) provider, issuing bank/network operator (BNO) provider and customer relations management company’s (CRM).
Infrastructure Provider – This service provides secure data networks for transactions worldwide. This allows merchants to accept transactions with their customers in one or multiple countries simultaneously.
Merchant Acquirer/Processor/Gateway Provider (MPG) – These companies provide services to merchants enabling them to securely accept credit cards or alternative forms of payment such as mobile payments or bank transfers.
Issuing Bank/Network Operator Provider (BNO) – These organizations are responsible for authorizing all cardholder transactions worldwide by linking the networks for all information exchange between parties involved in each transaction to take place successfully.
Customer Relations Management Company’s Provider (CRM)– These companies offer back-end support for managing customer relationships which are important when dealing with digital payments or customers worldwide that need help with only certain types of issues including billing disputes, refunds etc…
How will the Apollo-Worldline deal affect the industry
The news of Apollo Global Management’s purchase of world’s leading payment services provider, Worldline, has had an instant impact on the global payment industry. This reflects the reality that providers must keep up with changing technology and customers want to remain competitive.
The $2.3 billion deal creates one of Europe’s largest payments processing companies, leading to a paradigm shift in how merchants manage payments globally. In addition, it further strengthens Apollo’s commitment to grow its payment platform and increase its exposure in the global payments market.
The new deal from Apollo aims to bring significant technological advances by optimizing technologies related to terminal management, biometrics authentication, and contactless solutions — essentially providing a more efficient and secure platform for card-based payments processing worldwide. This will benefit customers and merchants alike who will no longer have to worry about managing multiple payment systems but rather have it all under one roof — an unparalleled convenience factor.
Notably, this deal will add greater scalability options to enable larger clients such as financial service providers to access additional features that improve their customer experience while benefiting from economies of scale regarding pricing structures. It further allows better insights into markets worldwide due to increased access implemented through a unified platform — giving clients greater flexibility to manage their accounts.
Overall, Apollo’s acquisition of Worldline is creating a spark in the global payment industry that could revolutionize how businesses are done around the world regarding financial transactions.
Benefits of the Acquisition
The world’s number one payment processor, Apollo, just announced its intention to purchase Worldline’s terminal business for $2.3 billion. With this step, the leading multinational payment processing company looks to expand their market share in the terminal business.
This acquisition could have various benefits for both companies and their customers. But, first, let’s explore the potential benefits of Apollo’s acquisition of Worldline’s terminal business.
What are the benefits for Apollo
Apollo Global Management, a multinational private equity firm, has agreed to purchase the terminal business of French company Worldline for €2 billion ($2.3 billion). This acquisition has various benefits for Apollo and its shareholders.
Through this deal, Apollo will gain an entry into the highly profitable European payments market which is estimated to reach more than €100 billion ($117% million) by 2020. The purchase of Worldline’s terminal business gives Apollo an estimated 40% market share in Europe. Moreover, this percentage is likely to grow following the consummation of this transaction, as Apollo plans to invest heavily in transforming and improving terminals and other related payment technologies going forward.
By integrating their newly acquired technology and terminal solutions into their existing portfolio of payment processing solutions, Apollo will be able to offer end-to-end coverage of payment solutions across Europe by catering to retail merchants, government entities and large corporations alike.
Finally, this deal provides Apollo greater financial stability due to recurring high margin revenues generated from processing transactions on Worldline’s terminal infrastructure.
What are the benefits for Worldline
The $2.3 billion deal between Apollo Global Management and Worldline puts Worldline in a prime position to become a major global player as its terminal business is acquired by Apollo. With the acquisition, Worldline can benefit from increased operational efficiencies and scale, new technological capabilities and a strengthened foothold in existing markets.
Operationally, acquiring companies will bring different capabilities and resources, providing a platform for cost savings and efficiencies where resources are better aligned or need streamlining because of newly found synergies. For example, in the case of Worldline’s terminal business deal with Apollo, Worldline stands to gain increased operational efficiency due to combining its existing infrastructure with Apollo’s global base of customers and operations across multiple continents.
Technology is another major benefit that comes with the acquisition of Worldline’s terminal business. Not only will operational capabilities be improved due to more established infrastructure, but it provides an opportunity for basic improvements in areas such as occupancy rates, customer service satisfaction levels, transaction speed and more that come along with what advanced technology has to offer when applied correctly.
Finally, the most valuable blend comes when potential market expansion opportunities are taken into account – set against the backdrop of strong local presence already established by both companies worldwide across various industries – plus an increase in performance through such improvement created through achieved synergies and additional services offerings for customers on one single platform.
The resulting joint force could very well be highly attractive to larger number of customers from multiples industries stretching from retail & hospitality up to banking & financial institutions benefitting all present partners while creating value together hand-in-hand on one single connected data platform worldwide giving all involved access to this powerful digital ecosystem – simply increasing exposure significantly; all leading towards reaching higher service quality levels at lowered cost throughout all segments recognized by public & private sector alike on digital multi-platform exposed solutions each party can benefit deeply alone or even better intertwined together!
Potential Challenges
Apollo Nears $2.3 Billion Deal for Worldline’s Terminal Business marks the continuation of the company’s growth strategy. It is a move that will benefit both companies and create new opportunities for the industry.
However, with any major merger, there can be potential challenges that must be addressed. This section will discuss the potential challenges that Apollo and Worldline may face during the transition.
Regulatory Challenges
Apollo Global Management’s proposed $2.3 billion acquisition of the Information Technology Terminals (IT) business of French payments company Worldline may face significant regulatory challenges in Europe. The European Commission’s merger regulations ensure that firms exist in competitive markets and protect consumers against anti-competitive practices.
As a result, mergers of companies within the same industry and those between complementary industries should be carefully examined by antitrust authorities.
Regulatory agencies may designate each type of transaction as either a horizontal merger or vertical merger based on their evaluation of the effect the combined entity would have on the market. A horizontal merger involves two or more rivals across an industry consolidating to form a larger market share. In contrast, a vertical merger involves companies who operate at different levels within one supply chain combining to form a single entity. In both scenarios, expected barriers to entry increase and rivals are removed from the market which could cause pricing issues for consumers.
The proposed acquisition by Apollo Global Management falls closer into that of a vertical merger given that it would combine two companies operating at different levels within one industry – payment processing and terminals respectively – making their production system into one integrated entity potentially reducing competition noticeably over time.
As a result, the European Commission is likely to take preliminary measures to preserve competition, such as requiring divestment from certain elements or forming restrictions around certain entities such as non-competition and intellectual property agreements between the merged entity and its divestiture partners after completion of the transaction.
Competition Challenges
As part of the purchase, Apollo will acquire Worldline’s terminal business, Europe’s largest provider of point-of-sale (POS) systems. This acquisition will put the company in a stronger competitive position to win more contracts and maintain market share. However, potential competition challenges may arise as the POS terminals landscape changes.
With the continued growth of digital payment methods such as Apple Pay, Samsung Pay and eWallets, customers increasingly expect streamlined mobile checkout options to help them pay quickly and securely. Thus, it will be important for Apollo to remain at the forefront of this shift towards more innovative payment solutions to continue appealing to merchants.
In addition to keeping consumers satisfied with a reliable service, Apollo must provide secure technology that meets all necessary security regulations while providing seamless integration with third-party companies and services. With stricter laws being enforced across various countries regarding data protection and privacy, there could potentially be regulatory requirements that must be met for operations to continue running smoothly.
Finally, both Worldline and Apollo could face complexities associated with existing market shares depending on local regulations or conditions; rival companies may have influence or higher user awareness within certain locations which could present a challenge in expanding globally or further into new markets.
Conclusion
In a major business development, Apollo Global Management has announced plans to purchase Worldline’s business from Atos for €2.4 billion (US$2.3 billion). The deal, agreed by both parties on February 19th 2021 and expected to close in the second half of 2021, will see Apollo become the largest payment and merchant acquiring services provider in Europe and one of the world’s leading players in the global payments industry.
Under the agreement, Apollo will purchase Worldline’s global point-of-sale terminals, consumer credit card acceptance terminal solutions, and other technology and terminal businesses in over 27 countries across Europe. The transaction is expected to strengthen both companies’ ability to broaden their payment processing portfolios internationally.
The acquisition also helps expand Apollo’s foothold as a leader in providing innovative payment technologies and services to customers worldwide while scaling its operations through direct marketing capabilities that can be quickly deployed while leveraging existing infrastructures in various global markets. Furthermore, it provides access to an array of new cards including contactless payments — perfect for today’s digital economy — that can help retailers drive more traffic into stores while offering optimal convenience for end consumers.
The deal marks another milestone for Apollo as it continues its aggressive growth plan for its payments portfolio as part of its larger global payments strategy. With leverage from this latest deal, both companies will be able to quickly innovate products and services more efficiently than ever before — no matter what currency or region they operate in — helping retailers gain intelligence on consumer behaviors inside their stores or online with increased security options that are fast and reliable.
What’s Next for Worldline and Apollo
After months of negotiations, Apollo Global Management and French payment processor Worldline have reportedly reached an agreement for Apollo to acquire Worldline’s terminal business in a deal worth 2.3 billion euros ($2.7 billion).
Following the official announcement, both companies outlined their respective plans for the future with Apollo describing its approach as one focused on “investing time and effort into new technologies, developing integrated solutions” and “leveraging Worldline’s global capabilities across terminals, software and services to drive growth and make the brand more customer friendly.”
Meanwhile, Worldline wants to diversify its portfolio by acquiring cloud-based systems to enhance customer service through machine learning. In addition, the company plans to invest further in artificial intelligence to assist merchants with risk analysis and fraud detection solutions.
By merging two large operators in the terminal industry – Apollo and Worldline – this offers an increased presence on a global scale that was previously unaffordable for either firm alone. As such both companies will naturally benefit from the improved market access enabled by this new deal.
This move allows both companies to differentiate themselves from other competitors by offering comprehensive end-to-end payment solutions via connected systems, allowing merchants access to real-time data usage analytics worldwide. This could open up even more opportunities for expansion into new countries congruent with their respective strategies for future growth as individual entities before merger talks began. This merger should create an interesting synergy between these two firms that will be worth watching throughout 2021 and beyond!
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