Advent and Bain score payouts after sparking payments deals

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Advent International and Bain Capital have made quite a team in payments industry deals.

For almost a decade, the two firms have paired up to take over companies in the industry. On Monday, their Italian payments firm Nexi said that it plans to list shares on the Milan exchange. The company aims to raise as much as 2.7 billion euros ($3.1 billion), people familiar with the matter said, which could be the largest initial public offering in Europe since German brake maker Knorr-Bremse AG generated about 3.9 billion euros for its owners in October.

Also on Monday, a previous investment, Worldpay Inc., was sold to Fidelity National Information Services Inc. for about $34 billion. Advent and Bain first agreed to buy a majority stake in Worldpay in 2010 from Royal Bank of Scotland Group Plc and listed it in 2015. Vantiv took the firm private in 2017 for 7.7 billion pounds ($10.2 billion).

“In Europe, payments have been dominated by the banks who were not strongly driving revenue out of these activities,” said Martina Weimert, a partner in the financial services practice at Oliver Wyman. “This gave private equity and some pure players the opportunity to lead the market consolidation.”

Bain and Advent kicked off the trend with their investment in Worldpay and were among the first driving consolidation in the industry. The payments sector is hot generally, with a wave of deals for companies that send cash electronically or process online payments in the past few years.

The industry is expected to grow to $2.42 trillion in revenue by 2027 from $1.27 trillion in 2017, according to a report from the Boston Consulting Group and financial messaging services provider Swift.

It’s not uncommon for private equity firms to continue working together on deals in the same industry.

In 2014, Bain and Advent bought Nets A/S for 17 billion kroner ($2.6 billion), listing the payments provider in 2016. Advent and Bain then sold Concardis Payment Group to Nets -- which had since been acquired by Hellman & Friedman -- for an undisclosed amount in 2018.

Payments can mean a lot of things. Companies like Mastercard Inc.’s new acquisition, Transfast, help customers send money abroad online, while Worldpay provides card machines to retailers and software to process mobile and online payments. They’ve all benefited from a boom in customers who are increasingly avoiding cash because they’re spending a greater proportion of their money online or paying quickly in store by tapping cards and phones on readers.

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