Sentenial Limited and its wholly-owned subsidiaries (“Sentenial”), and its Open Banking brand Nuapay, have been an early mover in the emerging Open Banking and Account-2-Account (“A2A”) payments sector in Europe. The acquisition broadens the EML product suite and positions EML to be able to take advantage of rapid scale growth in the Open Banking sector in Europe and to expand the capability across all regions.

EML Payments Limited (ASX: EML) (S&P/ASX 200) has entered into a binding agreement to acquire 100% of Sentenial for an upfront enterprise value of €70 million (A$108.6 million), plus an earn-out component of up to €40 million (A$62.1 million).

Sentenial is a cloud-native, API-first, full-stack enterprise-grade payments company, processing 45 billion Euro per annum and is dually regulated in the United Kingdom and France.

Sentenial, and its Open Banking brand Nuapay, operate in the fast-growing European Open Banking sector and provides EML with the capabilities to manage payments across scheme (Mastercard and Visa) and non-scheme (A2A), as well as both card and non-card payments.

EML intends to expand Sentenial's best in class platform and products into the North American and Australian markets. Post-completion of the acquisition, the combined group is expected to become one of the largest FinTech enablers in Open Banking and Prepaid globally.

The combined group will process in excess of A$90 billion in Gross Debit Volume (‘GDV’). Completion of the deal is subject to regulatory approval, and the acquisition is expected to complete in late FY21.

The Sentenial acquisition aligns with EML’s Accelerator Strategy and aims to ignite the Nuapay Open Banking product's international reach and expanded growth opportunity. Combining capabilities will create a world-first platform of Card Issuance, Open Banking and Programme Management products. Sentenial is an award-winning end-to-end bank-grade payments platform whose clients include traditional international tier-one banks, payment platforms and major corporates.

The shared vision that Open Banking is an essential offering for industry impacting embedded payment solutions is an exciting synergy between both companies. EML considers Open Banking a critical and required offering within its world-class open, Payments-as-a-Platform business by providing clients and hyper-growth FinTechs with the ability to embed its payment products into their solutions seamlessly in a vast TAM.

Rationale Behind The Deal

  • Post-acquisition, EML will be a leading global player and one of the largest independent FinTech enablers in Open Banking and Prepaid anywhere in the world.
  • Sentenial is currently connected to 1,750 banks and growing across Europe.
  • Nuapay is one of the only Open Banking products in the marketplace, which provides merchants with a feature-rich Open Banking solution, including complete reconciliation and batch settlement of transactions.
  • With scheme payments as well as Account to Account Transfer (A2A Transfer) solutions all under one roof, EML and Sentenial are uniquely positioned to support clients. EML leads the race to mass market a single API-based platform that offers all dominant A2A Transfer payment types, including Direct Debits, Open Banking, Credit Transfers, Virtual Account products, International Bank Account Numbers (IBANs), Single Euro Payments Area (SEPA), Faster Payments Service (FPS) and Instant Payments to its partners.

Tom Cregan, EML’s Managing Director & Group CEO, stated: “EML has transitioned over the years from primarily a gift-card company to a company with a diverse revenue base across multiple prepaid products. 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.

EML supports thousands of prepaid programmes globally, and our platform is how our customers interact with us. Sentenial operates an enterprise-grade payments platform processing over 45 billion Euro per annum, and is, therefore, a similar business to EML but servicing a different customer set with different payment types. 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.

Sentenial is a European business today, and we will be working to extend its platform to our other regions in the coming 12-18 months.

Sean and the team have attracted an extraordinary calibre of international clients who trust its innovative products range, and the entire EML family looks forward to welcoming the Sentenial team, which is currently comprised of 60 full-time employees. Geographically, with its principal office in Ireland and offices located in London, Paris, Brussels and Krakow, Sentenial fits well with EML.''

Sean Fitzgerald, Founder & CEO at Sentenial, said:

“Nuapay’s mission is to be the best way to pay and get paid. We are proud to have developed a market-leading Account-to-Account and Open Banking payments platform over nearly two decades in business. The revolution in payments caused by Open Banking and Real-Time Payments is rapidly building momentum globally, and we are hugely excited by this opportunity to move to a global scale as part of EML. From the moment EML approached us, we’ve been impressed by their vision, ambition and growing ecosystem.''

Sentenial received financial advice from Jon Edirmanasinghe at Cavendish.