Payments firm Ingenico to buy rival Bambora for 1.5 billion euros: Reuters

French payments specialist Ingenico (INGC.PA) is to buy Stockholm-based rival Bambora from Nordic Capital for 1.5 billion euros ($1.7 billion) in the latest deal in the sector.

Payments firms have become targets for credit card companies and banks seeking to capitalize on a switch from cash transactions to paying by smartphone or other mobile devices.

Ingenico shares jumped 10 percent shortly after the opening of the Paris stock exchange. The stock was up almost 8 percent at 88.82 euros at 0915 GMT.

The acquisition of Bambora, which had gross revenues of 202 million euros in 2016, would lift Ingenico’s earnings and lead to other benefits, Ingenico said in a statement on Thursday.

Ingenico’s takeover of Bambora follows a move this month by credit card processor Vantiv (VNTV.N) to buy Worldpay (WPG.L) for 7.7 billion pounds ($10 billion).

French payments company Worldline (WLN.PA) also said this month it had agreed to buy Swedish peer Digital River World Payments.

“Bambora will enhance our customer-centric approach and will reinforce our online and in-store positioning through a perfect complementarity,” said Ingenico Chairman and Chief Executive Philippe Lazare.

Private equity firm Nordic Capital launched Bambora in 2015 after acquiring a number of separate payment companies over the previous year.

The deal will increase Ingenico’s availability online and in stores in the Nordics, North America and Australia, said Bryan Garnier analyst Richard-Maxime Beaudoux said, who has a “Buy” recommendation on the stock.

Ingenico said the deal would be financed through available cash and debt. Its financial leverage would remain below 3 times EBITDA leaving Ingenico flexibility for future M&A.

Lazare told analysts on a call future M&A targets might concern payments through Android phones.

Ingenico, which also reported higher first-half profits and sales on Thursday, expected the Bambora takeover to boost its earnings per share by around 5 percent by 2018 and said it hoped to close the deal by the end of 2017.