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ATP, Advent and Bain in €2.3bn payments deal

The group aims to expand the business before listing it on one of the local Nordic stock exchanges.

Boston-based Advent International and Bain Capital have teamed up with Danish pension fund ATP to acquire Nets, a payment provider in the Nordic region, for DKK 17 billion (€2.3 billion; $3.1 billion).

Advent, Bain and ATP will buy the company from the existing shareholders, a group of 186 primarily Danish and Norwegian banks. They will also pay a dividend for 2013 which totals DKK498 million (€67 million, $92 million), according to a statement.

Both Advent and Bain will invest DKK2.6 billion of equity (€350 million, $480 million) in the business. ATP will invest DKK 3.6 billion (€480 million, $670 million), consisting of DKK 300 million of equity capital (€40 million, $55 million) and DKK 3.3 billion (€440 million, $610 million) structured as a payment in kind note.

ATP Private Equity Partners, a private equity fund which invests approximately €1.4 billion on behalf of ATP, is investing DKK 150 million (€20 million, $28 million) of equity in Nets, while Via Venture Partners, a Nordic private equity firm whose sole LP is ATP, is also investing DKK 150 million of equity.

It is understood that the deal consists of 50 percent debt and 50 percent equity. It remains subject to regulatory approvals, but is expected to complete in the second quarter of this year.

Bain and Advent declined to comment beyond the statement, while ATP did not respond to a request for comment at press time.

Copenhagen-based Nets handles payment transactions between connects banks and businesses, and has a workforce of 2,600 in Denmark, Norway, Finland, Sweden and Estonia. In 2010, Nets was created in its current form through the merger of Norwegian group Nordito and Danish business PBS. In 2012, the company's pan-Nordic platform was further expanded through the acquisition of Finnish payments company Luottokunta.

“We see a compelling investment opportunity to transform Nets from a strong Nordic company into a Northern European leader within the payments industry. We are pleased to partner with Advent International and Bain Capital who bring deep insight into the industry and we look forward to playing an active role in growing and improving the business,” Carsten Stendevad, chief executive officer at ATP, said in the statement.

The consortium anticipates that it will list the business on a local exchange “when the company is ready”, it said in the statement.

As a payment processer, Nets has access to sensitive personal data. Advent and Bain have teamed up with ATP as they felt it was important to work with a credible local investor, according to a source familiar with the matter.

“We are well aware of the responsibilities that come with ownership of a critical infrastructure provider, as we have a strong track record of investing in and growing similar businesses in Europe and globally,” James Brocklebank, managing partner and head of Advent International’s financial services sector team in Europe, said in the statement.

“Nets is a household name across the Nordics with a strong reputation built on a foundation of trust,” Robin Marshall, managing director and co-head of Bain Capital’s financial services team in Europe, said in the statement. “Our history of working with similar businesses has taught us that a reputation for operational reliability and rigorous data protection is hard won and easily lost, and both will be absolute priorities for us in the years ahead.”

It is understood Advent made the investment form its Advent International GPE VII, which closed on its €8.5 billion hard-cap in November 2012. This will be the tenth investment from this vehicle.

Bain Capital made the investment from its Bain Capital Fund X, a $10.71 billion 2007-vintage, according to Private Equity International’s Research and Analytics division. It is understood the firm also used its Bain Capital Europe Fund III, a €3.5 billion vehicle which closed in 2008, as well as several co-investment vehicles.