The Group enters the fast-growing North American corporate payment market
Edenred, the world leader in transactional solutions for companies, employees
and merchants, has signed an agreement to acquire Corporate Spending
Innovations ("CSI"), one of the leading providers of automated corporate
payment software in North America. By acquiring this well-established,
fast-growing and profitable fintech, Edenred is now well positioned to seize
the multiple opportunities offered by the North American corporate payment
market, experiencing fast-paced digitization. The acquisition, for an amount of
around USD 600 million, follows on from a European partnership formed close to
two years ago between the two companies. In line with the Fast Forward
strategic plan, the transaction will enable Edenred to step up its development
in the fast-growing corporate payment segment, enhance its digital payment
technology platform and significantly increase its presence in North America.
Headquartered in Naples, Florida, CSI is one of the leading North American
providers of corporate payment solutions. Capitalizing on its best-in-class,
cloud-based accounts payable software, the company automates and streamlines
B2B payments for its portfolio of more than 800 corporate clients, thereby
facilitating payment to their 475,000 vendors. In 2018, CSI expects to manage
payment volumes of around USD 11 billion and process some 900,000 transactions.
CSI, as an established, profitable fintech has delivered double-digit revenue
growth for several years now and forecasts adjusted EBITDA(1) of USD 26 million
in full-year 2018.
Leveraging a unique digital platform to enter a large, booming market
The acquisition will enable Edenred to significantly expand its footprint in
North America, where the addressable corporate payment market is USD 25
trillion(2), or 20% of the world total. This market is experiencing fast-paced
digitization, as cash and checks still represent close to two- thirds of all
B2B payments. This reliance on manual and paper-based processes results in a
lack of visibility and a risk of fraud as well as costly, time-consuming
invoice reconciliation. Edenred expects CSI to tackle this opportunity and
achieve annual revenue growth of around 20% over the next few years.
CSI provides a unique payment automation platform that simplifies and
streamlines the management of the entire accounts payable process. The solution
has the additional advantage of covering all payment methods, including
MasterCard and Visa virtual cards, ACH(3) payments, procurement cards and
checks. Building on a wide acceptance network of more than 475,000 vendors,
and integrated with a large number of ERPs and travel booking tools via a
selection of APIs, CSI's platform brings accuracy, cost-efficiency, security,
easy reconciliation and real-time control to supplier payments for its clients.
(1) EBITDA adjusted for non-recurring expenses.
(2) MasterCard investor community presentation, 2017.
After first targeting and building expertise among companies in the media,
hospitality and sports & events industries, CSI is currently tackling other
sectors including healthcare, insurance, telecoms and education via direct and
indirect distribution channels, with a view to expanding its presence in a
largely underpenetrated market.
In addition to its Accounts Payable business, CSI has also long distributed
fleet cards to companies, and more recently launched a range of innovative
payment solutions for corporate travel. These complementary businesses
represent further growth opportunities in both North America and international
A strategic acquisition, in line with the Fast Forward plan
Edenred is continuously enhancing its global technology platform to deliver
safer, more efficient and increasingly innovative services to its unique
ecosystem of 770,000 corporate clients, 1.5 million partner merchants and 44
million employee users. Following the launch of its corporate payment offer
nearly two years ago, Edenred now provides innovative pay-out solutions. These
are based on virtual card issuing as well as customized digital cash-in systems
such as IATA Easypay, which is gradually being deployed in more than 110
countries, and an identified bank transfer service, rolled out for the 1.5
million clients of French real estate company Foncia.
With the acquisition of CSI, Edenred is considerably bolstering its expertise
in innovative payment solutions. The Group's global footprint will also serve
as a major driver in accelerating CSI's growth.
The acquisition, which is in line with the Fast Forward strategy, will enable
Edenred to step up its development in the buoyant corporate payment segment and
to significantly increase its exposure to the North American market.
The transaction is expected to close in early 2019. It will be accretive to
Group EBIT from 2019 and to net profit, Group share from 2020.
"With the acquisition of this North American partner, which we know well, we
now have many assets to become a major player in the buoyant corporate payment
industry. CSI is indeed a well-established and fast-growing fintech. We are
thereby accelerating the development of this business line, which will
contribute to generating ever more sustainable and profitable growth for the
Group, particularly in the United States," said Bertrand Dumazy, Chairman and
CEO of Edenred.
Keith Stone, Founder and CEO of CSI, said: "As one of our most valued partners,
Edenred has been able to support and enhance CSI's global footprint for the
past two years. This was truly a natural progression and an exciting move that
will further ignite CSI's impressive growth rates. We're also very excited for
what this means for our clients and employees. We look forward to expanding
our market-leading position, innovative technology platform, and accounts
payable services with the Edenred teams."
(3) Automated Clearing House, a US financial network used for electronic
payments and money transfers. Also known as "direct payments," ACH payments are
a way to transfer money from one bank account to another without using paper
checks, credit card networks, conventional wire transfers, or cash payments or
The transaction is subject to approval by the relevant competition authorities.
Edenred was advised by Citi, Hogan Lovells and Deloitte.
Edenred is the world leader in transactional solutions for companies, employees
and merchants, with business volume of more than EUR26 billion generated in
2017, of which 78% through digital formats. Whether delivered via mobile,
online platform, card or paper voucher, all of these solutions mean increased
purchasing power for employees, optimized expense management for companies and
additional business for partner merchants.
Edenred's offer is built around three business lines:
* Employee benefits (Ticket Restaurant(r), Ticket Alimentación, Ticket Plus,
* Fleet and mobility solutions (Ticket Log, Ticket Car, UTA, Empresarial, etc.)
* Complementary solutions including corporate payment (Edenred Corporate
Payment), incentive and rewards (Ticket Compliments, Ticket Kadéos) and
public social programs.
The Group brings together a unique network of 44 million employees, 770,000
companies and public institutions, and 1.5 million merchants.
Listed on the Euronext Paris stock exchange and part of the CAC Next 20 index,
Edenred operates in 45 countries, with close to 8,000 employees.
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