Nexi Group: How to deliver €30 million in value through post-merger integration

The leader in the Italian digital payment solutions market, Nexi is pioneering the transition to a cashless Europe by innovating payment technologies and simplifying digital transactions. Nexi’s rapid expansion culminated in a 2019 IPO, followed by acquisitions.

M&As are high-stake processes as is – but especially so when the acquisitions are of the scale made by Nexi for businesses dispersed across different geographies. Nexi acquired SIA, an Italian-based payment processor with operations across Italy and Eastern Europe, and Nets, the leading payment solutions provider in the Nordics and DACH (Germany, Austria, and Switzerland) region. Keen to maximise value creation, Nexi engaged Efficio during the pre-merger phase to identify the synergies of these three large companies in a clean room.

Nexi had two clear objectives for our engagement partnership:

1. Deliver €30m in procurement savings across the combined three companies by the end of 2022.
2. Consolidate the three separate procurement functions to build a new procurement community and define the future operating model to support the combined Nexi Group.

Results

Together, the Nexi and Efficio team:

• Delivered €30m in savings by June 2022, six months ahead of the target date
  • The due diligence target of €20.8m was achieved within the desired timeline
  • Key initiatives overachieved the initial target:
    • €12.7m run-rate savings for Terminal Hardware – achieved by leveraging the new cross-country price base
    • €6.9m run-rate savings on Application Development and Maintenance – achieved by leveraging supply base consolidation, demand management, and rate realignment
    • €5.1m run-rate savings for Professional Services – achieved by leveraging both the new cross-country price base and the consolidated volumes across the Group
    • €4.0m run-rate savings on Software – achieved by leveraging contractual terms realignment and consolidated volumes
• Boosted spend visibility and management through the creation of a consolidated spend cube
• Delivered an organisational sustainability workstream to make the procurement team independent and autonomous in delivering tangible benefits and results, elevating Procurement's strategic value within the business

Approach and challenges

Clean room assessment and post-merger integration

Efficio was engaged to perform a clean room opportunity assessment before the closure of this highly strategic three-way merger. Following the assessment, Efficio and Nexi Group teams started delivering the targeted synergies from day one. This brought much positive momentum at the board level, proving the success of this large M&A activity.

In an 18-month long transformation programme, Efficio supported Nexi across two waves of strategic sourcing projects, including initiatives in Information Technology, Operations, and Indirects, plus the implementation of an operating model for organisational sustainability. The sourcing process itself was also sped up by implementing a knowledge database, with templates, benchmarks, and repurposable material.

During a second wave, Efficio supported Nexi on the sourcing of new categories, plus the implementation of existing categories and an operating model for organisational sustainability. Efficio organised a series of category workshops to define the category strategy going forward, strengthening the relationship with the broader business. Spend visibility and management were broadly improved with the creation of a consolidated spend cube, categorised with global taxonomy recognised by the business-wide procurement team. In addition, Efficio implemented a knowledge database, with templates and material to speed up the sourcing process.

The importance of culture and change management
Following the acquisitions, company structures and culture also posed a significant challenge. Nexi, Nets, and SIA were companies of similar sizes, with well-established but very different ways of working. All three companies had had existing procurement departments, but they all had varying responsibilities within their respective organisations. Bringing the companies together meant needing to consolidate the functions’ roles and responsibilities within the wider business.

Efficio acted as the intermediary between the three companies in the pre-merger stage. Following the acquisitions, Efficio supported Procurement in building a community of stakeholders that could work together effectively and deliver results. This elevated the perception of Procurement from an administrative function in the individual companies into a strategic partner in the Group.

In the challenging process of bringing together three companies with already-established structures and differing backgrounds and geographies, the teamwork between Efficio and Nexi, Nets, and SIA was the key driver of the Group’s success. The Group has been able to foster a cohesive and collaborative community capable of delivering further significant business impacts as a result.

Efficio’s extensive experience in the payment and financial services sectors – including our previous consulting engagements with both Nexi and Nets – meant Efficio was the perfect partner to provide hands-on support and procurement expertise to build a new procurement team with members from the three organisations and exceed the synergy target. Together, the Nexi-Efficio team implemented a new operating model across processes, company culture, technology, and knowledge – making the new Nexi Group a truly united “Group”, instead of a patchwork of three separate companies.