Leading pan-European market infrastructure Euronext today completes the acquisition of the Borsa Italiana Group for a final consideration of €4,444 million.
As FX News Group has reported, the deal was first announced in October 2020, when LSEG said it had agreed to sell its entire shareholding in Borsa Italiana to Euronext.
The completion of the transaction successfully creates the leading pan-European market infrastructure and the leading venue for capital markets in Europe.
From a financial perspective, Euronext believes that the deal provides a compelling value proposition for shareholders. For the Financial Year ending 31 December 2020, the pro forma total revenue and income for the Group amounted to €1.4 billion; pro forma EBITDA amounted to €789.7 million and pro forma adjusted net income amounted to €497.6 million.
An integration plan is being developed, across several workstreams, under the oversight of an Integration Management Office, including representatives of both Euronext and the Borsa Italiana Group.
Euronext has signed a contract to host its Group core data centre with Aruba S.p.A. The data centre will be located in Bergamo, Italy. The date currently targeted for the first part of the Group core data centre migration, subject to regulatory approval and operational readiness, is set for 2022.
The migration is being planned in response to multiple factors, including the acquisition of the Borsa Italiana Group, the dynamic created by Brexit and a strong rationale to locate the Group’s core data centre in a country where Euronext operates a large business. This migration is being planned to be ready for the migration of the Borsa Italiana markets onto the Optiq® trading platform by 2023.
The final cash consideration to be paid to London Stock Exchange Group plc amounts to €4,444 million. The Transaction is financed through:
- ~€0.3 billion from the use of existing cash;
- ~€3.7 billion from the draw down of Euronext’s €4.4 billion bridge loan facility; and
- ~€0.6 billion from the private placement to CDP Equity and Intesa Sanpaolo.
Euronext is expecting to refinance the bridge loan facility through:
- ~€1.8 billion of new equity to be issued, through a rights offer to Euronext’s existing shareholders, as announced today11; and
- ~€1.8 billion of debt to be issued in the debt capital markets with long term maturities.
Euronext is committed to maintaining an investment grade credit rating, with a pro forma net debt to pro forma EBITDA leverage ratio of 3.2x as at 31 December 2020, which is expected to reduce below 3x by the end of 2022. Euronext does not expect any change in its dividend policy of a pay-out of 50% of its reported net income.
Euronext today also enters into a new €600 million Revolving Credit Facility, replacing its €400 million existing facility and reflecting the increased size of the Group.