Worldline in Talks with Apollo Funds to Sell Its TSS Business

Worldline [Euronext: WLN], a leader in the payments industry, has entered into exclusive talks with the Apollo Funds (as defined below) on the basis of a binding offer for the purchase of its Terminals, Solutions & Services ("TSS") Business Line.

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Following the strategic review of TSS aimed at supporting its ongoing transformation and further accelerating its development, Worldline has entered into exclusive talks with the investment funds managed by affiliates of Apollo (NYSE: APO) (the "Apollo Funds") upon receipt of a binding offer, for 100% of the shares of TSS, comprising a € 1.7 billion upfront consideration as well as preferred shares that could reach up to € 0.9 billion in value depending of the future value creation of TSS.

Worldline has entered into exclusive talks with Apollo Funds following a competitive process considering the overall quality of its offer, its strategic vision and industrial focus, its commitment to support the current TSS management and its sensitivity towards the French social context. Moreover, Apollo has a strong track-record in value creation and corporate carve-outs, with successful transformation of previously acquired businesses in France.

The contemplated transaction also encompasses the signing of a partnership agreement cementing the strategic and long-term commercial relationship between Worldline and TSS over the next 5 years.

Alongside the Apollo Funds, Worldline will remain associated to future value creation opportunities made possible by the robustness and quality of the TSS business and the transformation plan shared between the parties via the ownership of the preferred shares. This structure has been designed to align interests between Worldline and the Apollo Funds and will be directly linked to the total value creation achieved by TSS during its ownership by the Apollo Funds.

"This contemplated transaction, while being fundamentally triggered by the best interest of TSS, will also simplify our group structure, further increase our focus on our core activities and massively deleverage our balance sheet allowing the acceleration of our next strategic developments towards establishing Worldline as a truly global Paytech leader," said Worldline CEO Gilles Grapinet.

Based on the current valuation of the preferred shares, the total consideration amounts to € 2.3 billion at the time of the transaction announcement. The fair value of the preferred shares, estimated using a Black and Scholes model, will be accounted for € 0.6 billion on Worldline's balance sheet, as discussed with Worldline's auditors as part of the preparation of the 2021 financial statements. The fair value of the preferred shares upon completion is expected to correspond to the c.80% achievement level of TSS business plan and would reach its full value of € 0.9 billion if c.90% of TSS business plan is delivered, assuming limited valuation multiple re-rating at exit. The main impact of the disposal on Worldline's discontinued part of its financial statements will consist in a conservative non-cash technical impairment of c.€900m compared to TSS book value defined at Ingenico closing, pre-Covid components shortage crisis.

This transaction is subject to the signing of a final and definitive agreement between the parties and will be carried-out in the framework of the relevant social processes and ongoing dialogue with the employee representatives' bodies. The completion of the transaction is also subject to the approval of relevant regulatory authorities and is expected to close in the second half of 2022.

Source: GlobeNewswire