The acquisition extends Nayax’s global reach in attended retail while tripling our distribution network and adding 150K point of sale lanes
Nayax management will host an audio webcast today at 8:30 am ET
Nayax Ltd. (Nasdaq: NYAX; TASE: NYAX), a global commerce enablement payments and loyalty platform designed to help merchants scale their business, today announced that it will acquire 100% of Retail Pro International (“Retail Pro”), a global leader in retail Point of Sale (“POS”) software with Tier 1 global brand names across the world. Once closed, the acquisition will meaningfully expand the scope of Nayax’s retail business and solutions to over 9,000 retailers with approximately 150,000 POS lanes in more than 100 countries, including access to an extensive, worldwide partner ecosystem of over 80 distributors.
The purchase price for the transaction represents an implied enterprise value of $36.5 million on a cash-free debt-free basis, to be paid partially in cash and the remainder in cash or equity, subject to certain earnout targets being met. Management expects that following the closing, the acquisition will be immediately accretive to net income. The closing is expected to be in Q4 2023, subject to the satisfaction of customary closing conditions.
“Throughout their 30+ year brand history, Retail Pro has built a full featured, flexible product, capable of handling the complex, global retail environment. This has resulted in their powerful brand recognition as a premier retail management solution for Tier 1 global retailers,” said Yair Nechmad, Nayax Chief Executive Officer and Chairman of the Board. “We are pleased to be joining forces with Retail Pro’s talented expert team. Our combined businesses, together with Retail Pro’s 80 distributors, will triple our access to the global attended retail market and create a powerful and complete solution with Nayax’s payment and loyalty platform. We believe this combined offering will result in an unrivalled value of innovative retail solutions.”
“We are pleased to be part of a great company like Nayax, which shares our dedication to continued product innovation and customer experience,” said Kerry Lemos, Chief Executive Officer of Retail Pro. “Over the years, customers have come to trust our robust technology platform to optimize their complex retail operations. As part of a larger, multinational organization, we can continue to deliver on that mission on a much larger scale. We look forward to working closely together with Nayax’s team, as this coalition represents an ideal fit and strong win for our customers, partners, and employees globally.”
Strategic and Financial Highlights
- The global retail industry continues to benefit from embedded payment trends and strong demand for payments and POS systems. Global retailers continue to need multi-functional POS systems with management capabilities.
- Retail Pro has decades of retail industry experience combined with global market expertise.
- Immediately expands Nayax’s target addressable market and significantly increases our retail market penetration globally in new and faster growing regions.
- Highly complementary to Nayax Retail existing technology solutions and aligns with our growth strategy to scale the retail business and rapidly expand our global footprint.
- Retail Pro has built deep relationships with partners worldwide and has executed a go-to-market strategy that enables global reach and growth, while maintaining a low-cost sales and support structure.
- Strong ability to cross-sell Nayax’s payment platform into Retail Pro’s large distributor and customer base.
- Supports Nayax’s attractive financial profile, by adding diverse, global revenue sources consisting of license, professional services, subscription, and processing revenue.
- Given the expected closing of the transaction in Q4 2023, we do not expect a material impact on 2023 revenue or Adjusted EBITDA.
Transaction Details
- Both Nayax and Retail Pro have received unanimous approval by each company’s governing body for the transaction.
- The purchase price for the transaction represents an implied enterprise value of $36.5 million on a cash-free debt-free basis. Nayax expects $2 million of deferred revenue to be treated as a reduction to the purchase price.
- Purchase consists of an initial payment of approximately $20 million in cash at closing and the remainder, subject to certain earnout targets being met, paid over three years in either cash or equity as determined by Nayax.
- Nayax expects to finance the initial payment with already committed bank financing.
- For the fiscal year 2022, Retail Pro generated approximately $14 million in adjusted revenue and approximately $4 million in Adjusted EBITDA.
- The proposed transaction is expected to deliver both revenue and cost synergies from optimizing the combined operations of Nayax Retail and Retail Pro.
- The transaction is expected to close in Q4 2023, subject to the satisfaction of customary closing conditions.
Financial Guidance
Retail Pro’s impact on our fiscal year 2024 financials will not be discussed on today’s conference call. We look forward to providing 2024 guidance, including Retail Pro’s impact, on our earnings call in March 2024.
Advisors
Tiberius Capital Markets, a division of Arcadia Securities, is acting as financial advisor to Nayax. Reed Smith and Herzog Fox Neeman are serving as legal advisors to Nayax. Perkins Coie is serving as legal advisor to Retail Pro.
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