edenred has announced the purchase of 100% of the share capital by Reward Gateway, in such a way that it manages to improve and expand the range of services offered to the Human Resources departments of companies to manage their employees. are incorporated new participation tools that allow working life to be combined with the strictly personal field, making the entities more attractive to attract new talents.
Post-pandemic strategic and structural trends show that teleworking and the struggle to get the best talent have become two fundamental pillars, as well as the need to obtain greater purchasing power. That is why they think new formulas and solutions such as discounts that make employees choose one company over another.
The annexation of Reward Gateway to Edenred gives it the possibility of access a new market with many possibilitiessuch as the UK and Australia, where employee engagement levels represent a £1.9bn combined value in revenue. However, it is expected annual growth above 10%. In the US market, Reward Gateway’s presence is already worth £4.5bn in revenue.
In addition to the rewards, Edenred incorporates from the Reward Gateway the welfare benefits and corporate social animationa differentiating element in the current market.
Reward Gateway is one of the leading SaaS platform providers for employee participation. With its holistic and modular platform, it manages to improve the experience and motivate employees, integrating open APIs with more than 40 HRIS, payroll, collaboration tools, benefits and third-party software providers. A fully automated experience.
The economic keys of the operation
The purchase has been closed for a value of £1.15 billion. Note that Reward Gateway is currently in the hands of funds managed by private equity firms Abry Partners and castik capital.
In this way, Edenred will finance the purchase with a bridging loan of 1,000 million euros, refinanced a posteriori in the debt capital markets, as well as 300 million euros of available cash. The acquisition will increase group earnings per share from 2024 and will give Edenred a great advantage in terms of commercial, technological and cost synergies.
A strategic acquisition
Edenred has expanded its benefits and discounts for employees in more than 17 countries in recent years, standing out especially in Latin America after the recent acquisition of Gointegro.
For Reward Gateway it means carrying out the strategic plan beyond, which positions Edenred as the global platform that generates the greatest trust among employees. This helps Edenred to focus on the food sector through Beyond Food and attract new markets in an agile and effective way.
For its part, Reward Gateway gains presence in six key new countries for Edenred (Belgium, France, Germany, Romania, Italy and Spain), which will generate additional operating income and a boost from cross selling with the clients of both companies, promoting a integrated experience.
The economic impact of annexation
Reward Gateway’s income has been registering, in recent years, a continuous growth and high profitabilitytherefore it is expected to generate revenue of £95 million and EBITDA of £45 million by the end of fiscal year 2023. In addition, Reward Gateway obtains a valuation of 20x EV/EBITDA, marking a milestone in the Beyond strategic plan of Edenred.
Edenred, with 10,000 employees on its payroll, currently connects 52 million users and two million collaborating vendors in 45 different countries through one million corporate clients. It is listed on the Euronext Paris stock exchange.
Bertrand Dumazy, president and CEO of Edenred, has assessed the acquisition as something positive to implement a business model based on an efficient and scalable SaaS platform. In addition, he points out that the combination of its employees, solutions, customer bases and technologies generate a high potential for synergies.
For his part, Nick Burns, CEO of Reward Gateway, declares that he is proud of the merger to offer a single unified platform, merging their collective strengths.
