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Bank on it: EML becomes a global player with $108m takeover


Brisbane’s EML Payments has forecast it would process up to $90 billion in payments a year after it entered into the open banking market with a €70 million ($A108 million) purchase of  Ireland’s Sentenial Ltd.

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It’s a major step for EML, which has previously been a gift and prepaid card company. Its 2021 profit guidance was for earnings before interest tax, depreciation and amortisation (EBITDA) of $50 million.

However, EML said after the deal it would be a leading global player and one of the largest independent fintech enablers in open banking and pre-paid cards anywhere in the world.

The decision was welcomed by the market which pushed EML shares 9 per cent higher in morning trade.

It would fund the deal with $60 million in cash-on-hand. The additional $48 million would come from the issue of new EML shares. The deal also included a $62 million earn-out agreement, which was conditional on achieving a target of open banking revenue of $42 million. The earn-out would be payable in cash or equity.

Sentenial’s major product is Nuapay which processes about €42 billion a year as an outsourcing provider to leading banks. It services Barclays, Lloyds and Citibank.

EML said Nuapay was one of a few open banking products in the market. Open banking includes account-to-account payments but also allows third-party companies to access the financial data of banking customers.

The majority of its business is the provision of direct debit, credit transfers and real-time payments for major European banks. EML said the acquisition would broaden its base to include non-card payment products.

EML said acquisition would deepen customer relationships, enter new industry verticals and diversify revenue.

EML managing director Tom Cregan said the company had transitioned from being primarily a gift card company to one that had a diverse revenue base.

“The acquisition of Sentenial will be the next evolution of EML as we transition into a broader payments business by adding instant account-to-account payments into our suite of solutions for current and prospective customers,” Cregan said.

“The net result of bringing the companies together allows EML to increase our total addressable market by expanding our product suite. We see a number of opportunities to cross-sell account-to-account payments into existing EML customers and vice versa.”

EML also told investors Sentenial had an attractive customer base across banking, corporate and software industries including four of the top seven banks in the UK and some of the largest merchant acquirers in Europe.


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