TPG Makes €1 Billion Bid for Unit of Italian Payments Firm Nexi
The binding offer for Nexi's digital banking arm signals a significant push by the private equity giant into the European fintech sector amid market pressures.
Private equity firm TPG Inc. has made a binding offer of approximately €1 billion ($1.07 billion) to acquire a digital banking solutions unit from Italian payments group Nexi SpA, in a significant move to deepen its footprint in Europe's competitive financial technology landscape.
The bid, which represents roughly 5.2% of TPG’s $20.41 billion market capitalization, targets Nexi’s Digital Banking Solutions (DBS) business. If successful, the deal would be one of the larger European fintech transactions of the year, underscoring private equity's growing appetite for digital payment and banking infrastructure assets.
Shares of TPG were trading up 2.6% in recent market activity, though the formal offer was reported after market close. The move aligns with TPG's articulated strategy of expanding its European software and enterprise technology investments. The firm has been actively building its presence in the region, notably appointing Flavio Porciani as a Partner in London last year to spearhead these efforts. The potential Nexi deal follows TPG's recent pattern of fintech investments, including leading a $120 million funding round for UK-based business financial platform Tide earlier this year.
For Nexi, the offer comes at a critical juncture. The Milan-listed company has been under considerable market pressure, with its shares down nearly 26% year-to-date. The company recently reported a lower-than-expected core profit for the third quarter and delivered a cautious outlook on its profit margins, leading to a sharp drop in its stock price.
The potential divestment of its DBS unit could provide Nexi with a significant cash infusion to streamline operations and strengthen its balance sheet. The move follows Nexi's recent termination of an agreement to acquire the payments unit of Spanish bank Sabadell, a decision it attributed to shifting market conditions. Selling the DBS arm would allow Nexi to refocus on its core merchant acquiring and payment processing businesses.
Analysts see the bid as a logical step for both parties. For TPG, acquiring the established DBS unit offers an immediate, scaled entry into the digital banking infrastructure space in Europe. For Nexi, it represents an opportunity to realize value from a non-core asset during a period of strategic reassessment. The company has been actively expanding other partnerships, including a recent collaboration with Zucchetti for integrated payments in the retail and hospitality sectors, while also investing in artificial intelligence initiatives with partners like Google and Mastercard.
The European payments sector has become a hotbed for M&A activity, as established players and private equity firms alike seek to consolidate and capitalize on the ongoing shift from cash to digital transactions. TPG's binding offer signals confidence in the long-term growth of the underlying infrastructure that powers digital banking. The transaction is still subject to final negotiations and regulatory approvals. Neither TPG nor Nexi have issued an official public statement regarding the offer, which was first reported by Bloomberg.