Nayax acquiring smart parking company IPS for $350 million
The fintech and payments company will acquire IPS in an all-cash deal, expected to close in the fourth quarter; The acquired company operates parking solutions in more than 250,000 parking spaces and is expected to end the year with revenues of more than $90 million; Natyax will finance $150 million of the deal with new debt and the balance from its own cash
Fintech and payments company Nayax announced to the stock exchange that it has signed a binding agreement to acquire the American company IPS Group from the private equity fund Windjammer Capital, for $350 million in cash (on a debt-free and cash-free basis). The deal is expected to close during the fourth quarter of this year, subject to the required regulatory approvals. Nayax shares jumped more than 10% on the Tel Aviv Stock Exchange after the report.
The acquisition marks Nayax's broad entry into the field of smart parking solutions. IPS offers advanced solutions that include meters, enforcement software and permits, and manages over 250,000 parking spaces in the US, UK, Ireland and Canada. The move expands Nayax's potential target market (TAM) by $85 billion, bringing it to $342 billion at the 2029 level.
The transaction will be financed by Nayax through a combination of its cash reserves and new and committed debt in the amount of $150 million. The remaining consideration, $200 million, will be financed from the company's cash reserves, which currently stand at $304 million. After the transaction is completed, Nayax’s net financial debt to EBITDA ratio is expected to be 3.8. The company estimates that it will reduce it to a low of 3 by the end of 2027.
IPS is expected to end the year with revenues of more than $90 million, with 60% of them recurring revenues, and with adjusted EBITDA of $21 million. The purchase price reflects an adjusted EBITDA multiple of 17, which according to Nayax is expected to decrease to 12 considering the expected synergies. Nayax estimates that the transaction will generate EBITDA synergies of more than $8 million at an annualized rate through 2029, primarily through the integration of its clearing capabilities into IPS' systems.
After the transaction is completed, IPS management will continue to manage the company's operations from its offices in San Diego, California, under CEO Chad Randall. Nayax develops payment and settlement solutions for vending machines for various products, and is listed on the Tel Aviv Stock Exchange and NASDAQ.
