Ingenico To Buy Bambora and Reports Slight Turnaround in North American Business

Point-of-sale terminal maker Ingenico Group announced Thursday that it plans to buy Stockholm-based Bambora Group from Nordic Capital for €1.5 billion ($1.73 billion). The acquisition will put under Ingenico’s roof a fast-growing international payments provider that gets 90% of its revenues on a recurring basis.

Stockholm-based Bambora counts 110,000 businesses of all sizes in the Nordic countries, Australia, and North America as customers for its in-store, online, and mobile-payment services. The company posted gross revenues of €202 million in 2016. France-based Ingenico expects Bambora’s revenues to grow 20% in the next two years and pre-tax earnings to increase 30%.

“The acquisition of Bambora represents a key milestone in our strategic plan providing a more integrated client offering and omni-channel solutions,” Ingenico Group chairman and chief executive Philippe Lazare said in a statement. “Coupled with the investments made in our platforms and the development of new technological features, Bambora will enhance our customer-centric approach and will reinforce our online and in-store positioning through a perfect complementarity.”

Bambora gained a foothold in America in 2016 after Beanstream, a Canadian payments provider that Bambora bought in 2015 from e-commerce payments firm Digital River Inc., began U.S. operations. In May, Beanstream, which focuses on integrated software vendors (ISVs), adopted its parent company’s name.

Ingenico expects the cash and debt deal to close by year’s end.

Also today, Ingenico reported preliminary first-half results that show pro-forma revenues from North America fell 16% from a year earlier to €128 million ($147 million), but second-quarter North American revenues grew 1% to €76 million ($87.5 million).

Like its California-based rival VeriFone Systems Inc., Ingenico’s U.S. hardware sales have suffered recently because of a slowdown in purchases of EMV chip card-accepting POS terminals by small and mid-sized merchants. Both companies have placed some of the blame for the slumps on EMV rules changes and deadline postponements by the payment card networks.

“Challenges continue in portions of the market, particularly in the [small and mid-sized] sector as EMV migration is no longer a motivator for merchants to upgrade their payment devices,” Ingenico said. “Market continues to stabilize and existing inventory is being consumed.”

Ingenico said large U.S. retailers are continuing to buy its mobile-payment products, and it also said its new customers include the Red Lobster, Hooters, and Fazoli’s restaurant chains.