In the News:
Cielo reinforces its differentiation strategy and strengthens its products and services portfolio with Merchant e-Solutions
Barueri, July 2nd, 2012 - Cielo S.A. (BM&FBOVESPA: CIEL3 / OTC: CIOXY), Latin America's leader in electronic payment solutions has entered into a definitive agreement to acquire Merchant e-Solutions ("MeS"), a U.S.-based provider of full-service global payment solutions. Founded in 2000, MeS has the latest generation technology platform, developed specifically for the acquiring business, which has allowed the company to differentiate itself in the U.S. market. The acquisition of MeS and its best-in-class payment platform reinforces Cielo's strategy of offering innovative solutions and services to its customers and partners in Brazil.
MeS offers a comprehensive suite of solutions in traditional merchant acquiring as well as e-commerce and mobile payments, currently processing more than US$ 14 billion in transactions annually for more than 70,000 affiliated retailers, in partnership with over 250 financial institutions. For the last twelve months ended May 31st, 2012, MeS net revenue was US$ 124 million with an EBITDA margin of 45%.
MeS has substantial expertise and proprietary technology tailored to serving a diverse e-commerce merchant base. E-commerce accounted for 57% of 2012 year-to-date Net Revenue. In addition to the outstanding performance in e-commerce, the company also offers its customers a suite of payment solutions for mobile, recurring payments, and B2B.
The customization of the MeS platform, given its high scalability, efficiency and flexibility, for the Brazilian market, will allow Cielo to offer: (a) complete end-to-end services to merchants in both retail and e-commerce; (b) the best value proposition to Cielo's client base with a new suite of products and functionalities, along with better customer service offered through a web-based platform with features such as near-time statement generation and reconciliation solutions, (c) improved solutions and business tools for partner banks that will allow better integration to their distribution channels to ensure an efficient go-to-market strategy of their merchant acquiring value proposition, and (d) the best offering of e-commerce payment solutions, with cutting-edge features and functionality in the fastest growing segment of commerce in Brazil.
The advanced technology developed by MeS will provide Cielo with greater process automation (back office), flexibility and agility in developing new products and, consequently, will enable a lower time-to-market for new products and services. In addition, with the acquisition of MeS, Cielo gains a physical presence in Silicon Valley, a hotbed of technological innovation and currently the epicenter of the digital revolution in payments.
Cielo has agreed to pay a consideration of US$ 670 million, to be paid at closing of the transaction subject to the satisfaction of certain closing conditions.
Cielo was advised on the transaction by Goldman, Sachs & Co. Merchant e-Solutions was advised by JP Morgan.
Cielo SA (Bovespa: CIEL3 | OTC: CIOXY) is the Latin America's leader in electronic payment solutions. It is responsible for acquiring merchants and for the capture, transmission, processing and settlement of transactions made with credit cards and debit cards in Brazil. Through thousands of simultaneous and reliable operations, Cielo connects banks, card companies and merchants to power businesses and boost the economy.
The high technology applied in Cielo's network allows the company to operate with an availability rate of 99.995% over the year and 100% availability in major retail dates. With more than 1.2 million active establishments (considered those that had transactions effected at the terminals of Cielo in the last 60 days), Cielo covers 99% of Brazilian territory.
For the last twelve months ended March 31st, 2012, Cielo's transactional financial volume under the accounting criterion totaled R$ 337.7 billion. It captured 4.8 billion transactions in the same period.
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