Evertec to acquire Sinqia for BRL27.19 per share

Evertec and Sinqia jointly announced a definitive agreement for Evertec to acquire Sinqia, a leading player in the market of software for financial services in Brazil for consideration with a value of R$27.19 per share, increased by a customary daily “ticking fee” of up to R$1.00 per share depending on the timing of the closing, subject to certain limited exceptions. “Sinqia is a leader in providing software to the financial services industry in Brazil with an impressive history of delivering organic and inorganic growth,” said Mac Schuessler, President and Chief Executive Office of Evertec. “This is a highly complementary transaction, and together we plan to bring Evertec payments solutions to Brazil and Sinqia’s strategies to our Latin American markets.” Pursuant to the terms of the merger agreement, Evertec has agreed to acquire Sinqia’s outstanding equity for R$27.19 per share, plus a daily cash ticking fee of up to R$1.00 per share based on the daily SELIC rate published by the Central Bank of Brazil between signing and closing. Based on the closing price of Sinqia shares on July 19, 2023, Sinqia has an equity valuation of R$2,326 million (USD$485 million) and an enterprise value of R$2,835 million (USD$591 million). The transaction represents an approximate 24.0% premium to the unaffected share price at July 19, 2023 and a 22.6% premium to the prior 30-day volume weighted average price. Consideration will be in the form of 90% cash 10% Evertec shares in order to benefit from an expedited process to closing that minimizes execution risk. Evertec has extended and expanded its share repurchase program with the intent of offsetting the impact of newly issued shares as part of the transaction which amount to approximately 1.2 million shares. Evertec intends to finance the acquisition with cash on hand and committed financing of $600 million as the Company looks to maintain a strong balance sheet that provides for added flexibility to continue executing on our diversification and M&A plans. Transaction has been unanimously approved by the boards of directors of both Evertec and Sinqia and is expected to be completed during the fourth quarter of 2023, subject to satisfaction of customary closing conditions and approvals. The transaction is subject to Sinqia stockholder approval of a simple majority (greater than 50%). As of the signing of the merger agreement Evertec has entered into an agreement with shareholders representing approximately 40% of Sinqia’s outstanding shares to vote in favor of the transaction. Evertec shareholder approval is not required and is not a condition to closing the proposed transaction. The proposed transaction is expected to be breakeven to slightly accretive to 2024 Adjusted earnings per share and accretive in 2025.