Italy’s Nexi Will File for Up to $3.1 Billion Milan IPO in April

(Bloomberg) -- Italy’s Nexi SpA plans to list shares on the Milan exchange in an offering expected to be the world’s biggest so far this year, as payment service companies test investor appetite in Europe’s lackluster IPO market.

Nexi plans to issue a mix of existing and new shares by the end of April, it said in a statement Monday. The target is to raise as much as 2.7 billion euros ($3.1 billion), according to people familiar with the plan, who said the company wants to complete its listing before European Parliament elections in May.

The tight timetable is a result of concerns over political instability in the wake of the May vote, according to the people, who asked not to be named citing the privacy of the matter. A representative for Nexi declined to comment.

Network International

Nexi investors Advent International, Bain Capital and Clessidra SGR are seeking to raise as much as 2 billion euros by selling a portion of their holdings, the people said. An additional 600 million euros to 700 million euros will be raised by issuing new shares, Nexi said. The proceeds from the capital increase will mainly be used to reduce debt.

Nexi follows Middle Eastern payment processor Network International, which announced March 14 its plan for a London IPO in the next four weeks. Both deals come at a time when concerns over Brexit and slowing growth in Germany and France have pushed volumes to the lowest level since the financial crisis, according to data compiled by Bloomberg.

Fidelity National Information Services Inc. also on Monday agreed to acquire Worldpay Inc. for about $34 billion in cash and stock, the biggest deal ever in the booming international payments sector.

Pirelli, Knorr-Bremse

The Nexi IPO could become the largest in Europe since German brake maker Knorr-Bremse AG generated about 3.9 billion euros for its owners in October. It would also be the biggest listing in Milan since Pirelli & C. SpA returned to the market in April 2017. The listing could give Nexi an enterprise value of about 7 billion euros, the people said.

“This is an important IPO for the Italian market,” said Stefano Girola, a portfolio manager at Alicanto Capital SGR in Milan. “Nexi’s business raises investor appetite and the current political stability, with a decline in perceived country risk, offers a good window to list. The company’s limited presence abroad, with a concentration on Italian market, may weigh on the valuation.”

Nexi is Italy’s biggest payment-service company, operating in merchant servicing, card payments and digital solutions. The firm has partnerships with about 150 Italian banks and has a 60 percent market share in card issuing. Nexi posted net income of 20 million euros last year with operating revenue of 931 million euros.

Bank of America Corp., Credit Suisse Group AG, Banca IMI SpA, Goldman Sachs Group Inc. and Mediobanca SpA are managing the initial public offering. The firm starts pre-marketing on Monday, according to the people familiar.

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