Shares in Australian fintech EML Payments (ASX: EML) jumped 5.8% today on news that it would acquire Irish open-banking platform Sentenial for €70 million (A$108.6m), plus an earn-out component of up to €40 million (A$62.1m).
Sentenial, and its Open Banking brand Nuapay, operate in Europe via more than 1,750 banks, processing €45 billion in payments annually. Nuapay specialises in the account-2-account (A2A) payments sector in Europe.
The deal gives EML access to Europe, turning it into a major global player and one of the largest independent fintech enablers in Open Banking and prepaid, processing more than A$90 billion in Gross Debit Volume.
The deal is subject to regulatory approval, with the acquisition is expected to complete in late FY21.
EML Managing Director & Group CEO Tom Cregan said the fintech has transitioned over the years from primarily a gift-card company to a company with a diverse revenue base across multiple prepaid products and while Sentenial is a similar business, services a different customer set with different payment types.
“The acquisition of Sentenial will be the next evolution for EML, as we transition into a broader payments business by adding instant account-to-account (Open Banking) payments into our suite of solutions for current and prospective customers,” he said.
“The net result of bringing the companies together allows EML to increase our total addressable market by expanding our product suite, and we see a number of opportunities to cross-sell Account to Account payments into existing EML customers, and vice versa.”
He said EML will look to extend the Sentenial platform to its other regions in the coming 12-18 months.
EML shares closed Wednesday at $5.42.