Euronet Worldwide has agreed to buy the Piraeus Bank Merchant Acquiring (PBMA) business of the largest bank in Greece, Piraeus Bank, for $360 million. This transaction also includes an agreement for a long-term strategic partnership between the two companies for collaborative product distribution, processing and customer referrals.
Upon closing of this transaction, Euronet Worldwide (EEFT) will be Piraeus Bank’s exclusive long-term partner for provisioning of merchant acquiring services to Piraeus Bank customers.
The acquired assets and services include about 205,000 POS terminals at 170,000 merchants across Greece.
Euronet Chairman and CEO Michael J. Brown said, “Because of our prior relationship, we understand the technology, which will ensure a smooth transition from the bank’s systems to ours. We are also eager to apply our expertise to the digital payments side of this transaction. In addition to the fundamental growth in digital payments, we believe we can aggressively grow the online merchant transactions through the use of the payments technologies in our REN Ecosystem.”
This transaction further bolsters Euronet’s omnichannel payments strategy, under which it provides a slew of services such as cash, card-based acquiring solutions, online acquiring and tokenized payments.
According to the company, “the domestic acquiring volume in Greece will double from about $35.8 billion in 2020 to about $71.7 billion by 2031.”
The transaction is expected to close in fiscal 2021 and contribute $80 million to $90 million to Euronet’s revenue in first year of operations. (See Euronet stock analysis on TipRanks)
On March 4, Needham analyst Mayank Tandon reiterated a Buy rating on the stock and raised the price target to $185 (21.7% upside potential) from $170.
Tandon said, “While fundamentals in the EFT segment have been pressured recently, we expect the segment to bounce back sharply on the other side of the pandemic. In addition, we are impressed by the solid momentum in the ePay and money transfer segments, where we see an expanding set of growth opportunities.”
Turning to the rest of the Street, the stock has a Strong Buy consensus rating alongside an average analyst price target of $177.83 (17% upside potential). That’s based on 6 unanimous Buys. Shares have rallied about 85.4% over the past year.
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