Worldline SA, a global leader in the payments and transactional services industry, has recently completed the sale of its Terminal Solutions and Services (TSS) business to Apollo Funds. This acquisition marks a key milestone in Worldline’s long-term strategy to develop innovative and customer-centric integrated payment and transactional services.
Let’s delve deeper into this acquisition and its implications.
Worldline successfully completes the sale of TSS activities to Apollo Funds
Worldline, a European leader in the payment and transactional services industry, has completed the sale of some of its Technical Service Solutions (TSS) activities in Europe to funds managed by Apollo Global Management. The transaction is part of Worldline’s strategic transformation and created an important financial flexibility for Worldline Group.
Worldline offers global payments and transactional services that enable the digital transformation of businesses worldwide. As global demand for smart payment and transactional services continues to grow, Worldline helps its customers better serve their customers by providing access to innovative digital products. As part of its strategy, Worldline offers value-added solutions based on four main service lines: Payment Services, Merchant Services & Terminals, Mobility & e-Transactional Services, and Financial Processing & Software Licensing.
Through its TSS activities, Worldline provided technical support services in areas such as hardware rollout and client lifecycle management services such as procurement, warehousing & logistics, installation & integration, marketing customization, and technical support to merchants throughout Europe. This business generated €265 million of revenue in 2020, representing 6% of total consolidated revenue. Following completion as part of the transaction announced today, this business will no longer be part of Worldline’s ongoing operations.
Overview of the Acquisition
The acquisition of a business is a significant event. It requires careful planning, negotiations, and thorough examination of legal, financial, and other matters. An acquisition should provide the purchasing company with enhanced prospects in terms of sales, profits and overall synergies. For an acquisition to be successful it must create a “win-win” situation for both parties involved where the purchase provides tangible value and economies of scale for the purchaser and an attractive exit or transition opportunity for the seller.
When considering an acquisition, several aspects must be considered: strategic objectives, legal compliance, financing options, due diligence and operational integration. A comprehensive understanding of each phase is critical to ensuring a successful outcome. Strategic objectives refer to the goals an enterprise wishes to achieve by purchasing a business. This could involve expanding into new markets, consolidating existing markets, or gaining access to key resources or technologies.
Legal compliance involves ensuring that any transaction meets all applicable legal requirements including industry specific regulations. In addition, appropriate paperwork is completed correctly such as letters of intent and purchase agreements. Finally, financing options refer to how the transaction will be funded from either internal resources or external sources such as banks or private equity investors.
Due diligence involves:
- Analyzing financial statements.
- Assessing potential liabilities associated with management contracts and employee benefit programs.
- Other considerations include identifying potential intellectual property rights associated with technology transfer agreements.
Operational integration refers to how the acquired entity will be integrated into its purchasing entity post-transaction in terms of organizational design , systems alignment , human resource management etc
Worldline, a world leader in the payment and transactional services industry, today announced that it has completed the sale of its TSS (Terminal Solutions Segment) activities to funds managed by Apollo Global Management, a leading global alternative investment manager.
This acquisition is set to strengthen Worldline’s capabilities, creating the world’s largest payment and digital platform and offering comprehensive services to accelerate the digital transformation of its clients across the globe.
Here, we will discuss the details of this acquisition, including the impact on both companies.
Terms of the Acquisition
The terms of the acquisition of Worldline’s Technical and Security Services (TSS) business by funds advised by Apollo Global Management are as follows:
• The total purchase consideration is approximately €331 million, subject to customary closing adjustments;
• The consideration includes €149 million in cash that has been paid to Worldline and the balance of the purchase price will be settled through issuance of traditional debt instruments;
• Worldline Financial Services will not be included in the transaction and will remain part of Worldline’s portfolio;
• The transaction excludes material customer contracts or intellectual property rights.
•The transfer of personnel is expected to be completed by end-2021. A comprehensive set of commitments has been agreed between Worldline, its employees covered by collective bargaining agreements and Apollo Funds, ensuring fair social conditions for all impacted employees.
Impact of the Acquisition
The sale of the TSS business to Apollo Funds is expected to boost Worldline’s strategic positioning as a major player in Europe and beyond, enabling the company to better respond to market and customer needs. In addition, the divestment is estimated to strengthen Worldline’s balance sheet by €150 million.
In addition, the acquisition also provides Apollo Funds with a strong foothold in e-payment transactions and services, such as credit card processing, point of sale and mobile payments, and authentication solutions that enable secure remote payments. The combined entity will benefit from instant access to over 3 billion customers in 150 countries worldwide, giving it a stronger regional presence with an extensive global reach.
More importantly, this acquisition will create lasting value for both companies involved—Worldline through improved financial valuations and Apollo Funds through increased brand presence in the payments field. With their expertise in technology, marketing and customer service capabilities, joint operations are projected to deliver exceptional results for both parties and create greater avenues for growth in their respective fields.
Benefits of the Acquisition
Worldline’s successful completion of selling its TSS (Transaction Services and Solutions) activities to Apollo Funds marks a new era for both the companies. This acquisition will bring many benefits to Worldline and Apollo Funds, including increased market reach, extended customer base, and improved efficiencies.
Let’s look at some of the key advantages of this transaction.
Strengthened Financial Position
The sale of Worldline’s TSS business to Apollo Funds has greatly strengthened the company’s financial position. With the proceeds from the transaction, Worldline can further diversify its earnings from activities around its strategic areas, contribute to its ambitious development plan in payments, and reduce its net debt. The acquisition will enable Worldline to become a global leader in digital transformation for businesses and public authorities and secure lasting shareholder value.
Worldline has completed the sale of TSS activities to Apollo Funds, providing many opportunities for both parties. Apollo Funds will now be able to strengthen their presence in strategic fields with significant combined know-how while benefiting from access to Worldline’s extensive network of clients, products and services. On their side, Worldline will benefit from additional resources that allow it to focus on its growth projects while optimizing its financial structure.
Enhanced Global Reach
The sale of Worldline’s TSS activities to Apollo Funds is a strategic move by Worldline to enhance its global reach and increase its presence in the global market. The acquisition will enable Worldline to expand its operations and tap into the lucrative European markets, by having access to the technical and operational expertise that Apollo Funds bring. Through this enhanced reach, they can significantly reduce time-to-market, cut costs and achieve improved competitiveness across their services offering.
In addition, this will enable them to remain at the forefront of technology-driven changes in the ever-evolving payments landscape, creating new growth opportunities domestically and internationally.
In addition, it will strengthen their ability to capture larger, global accounts with increased capabilities across all geographies. Longer term benefits from this acquisition also include improved operational costs efficiencies as Apollo Funds bring economies of scale and cost savings from merged team structures. This can facilitate an expansion of activities for clients already served by either organization allowing for increased value employees reap from being a part of integrations that create mutual value.
Expanded Product Portfolio
Through selling its TSS activities to Apollo Funds, Worldline has completed a strategic decision to create long-term value for shareholders and customers. The transaction closed on July 17th 2019, has enabled Worldline to expand its presence in three of its four divisions (Web and Mobility Solutions, Terminals Services for Financial Institutions, Public Transportation Solutions).
The successful sale of TSS activities to Apollo Funds has allowed Worldline to extend its software and technology solutions across digital payments, processing services and infrastructure management. With enhanced expertise in the Digital Integration Services space along with the reinforcement of specific security teams and range of diverse services worldwide – customers can now benefit from an extensive product portfolio that covers an increased range of payment solutions (online/in-store) as well as more tailored services in cyber security.
On top of this, Worldline will continue to leverage its existing expertise across digital technology services such as OmniChannel Payment Platforms by eliminating repetitive or manual tasks related to payment processing globally. This commitment provides a comprehensive solution for customers looking for comprehensive technological integration across any device type or form factor – achieving higher cost efficiencies while driving operational excellence.
On November 29, 2020, Worldline completed the sale of its Transaction and Payment Services (TSS) activity to Funds managed by Apollo Global Management, LLC (“Apollo”). The agreement was initially announced on June 15, 2020. With this acquisition, Apollo will gain a majority stake in Worldline’s TSS activities and become a strategic partner of the Group.
The transaction marks a major milestone for Worldline in streamlining its portfolio while strengthening its European global leadership in digital payments. Through this sale, Worldline reaffirms its commitment to efficiency and providing better services to its clients while pursuing profitable growth.
Moreover, with the acquisition by Apollo Global Management as a strategic partner for TSS activities, Worldline strengthens its credentials as an end-to-end business transformation provider. This acquisition will also lead to accelerated development across multiple regions worldwide and industry segments yet to be explored in the digitization space.
In addition to increased efficiency and capital investments from Apollo Global Management, the partnership further helps solidify their position as one of the leaders in digital payment solutions globally.
The sale of Worldline’s TSS activities to Apollo Funds marks the latest development in Worldline’s commitment to its long-term strategy and customer offerings. The successful completion of the transaction provides Worldline with the resources and financial flexibility to focus on its target markets, pursue innovation opportunities, accelerate transformations in the payments industry, and enhance customer service.
The future outlook for Worldline is bright as it looks forward to leveraging its global network, expertise and innovative capabilities to effectively meet customer needs across geographies. With a heightened focus on furthering digital transformation solutions and being at the forefront of evolving technologies, this move is expected to bring significant value for all stakeholders of Worldline.
tags = successfully completed the sale and contribution of c. 85%, private equity funds managed by Apollo, online payment transaction, digitized payment, apollo parisbased worldline 2bdummett wall streetjournal, sources apollo worldline 2bdummett wall streetjournal, sources apollo global 2bdummett wall streetjournal, future value creation opportunities, current fair enterprise value, net of the closing price adjustments