Nayax Acquires US Smart Parking Firm IPS Group for $350 Million in Largest Deal Yet
Nayax, an Israeli fintech company specializing in cashless payment solutions, announced its largest acquisition to date on Tuesday. The company will pay $350 million in cash to acquire the American smart parking technology firm IPS Group from the US private equity fund Windjammer Capital Investors, which had acquired IPS in 2020 for an undisclosed amount. This acquisition marks Nayax's significant entry into the smart parking market and expands its presence in autonomous commerce.
According to Nayax, the deal values IPS at a multiple of 17 times the adjusted EBITDA expected this year. With anticipated synergies totaling $8 million annually by 2029, the effective multiple is about 12. Nayax expects the acquisition to be immediately accretive to its earnings. IPS, with over 20 years of experience, operates technology across more than 250,000 parking spaces, processing millions of transactions annually for municipalities, universities, and private operators. Its offerings include smart parking meters, mobile payments, and vehicle identification.
To finance the purchase, Nayax plans to raise approximately $150 million in debt, increasing its leverage. As of the end of Q2, Nayax held around $304 million in cash and investments and had long-term debt totaling $358 million. The company projects its net financial debt to EBITDA ratio will rise to 3.8 upon deal completion in Q4 2023 but expects it to fall below 3 by the end of 2027.
Nayax intends to integrate IPS's technology into its existing markets, focusing on Europe. CEO and Chairman Yair Nahmad highlighted that the combination will enable cities to manage and pay for urban services on a unified platform, linking parking with electric vehicle charging solutions. IPS CEO Chad Randal stated that joining Nayax will provide resources to expand globally and enhance its parking solutions ecosystem.
Nayax is publicly traded on both NASDAQ and the Tel Aviv Stock Exchange with a market capitalization of $1.7 billion. Its stock has declined 33% since its recent earnings report, following a downward revision of its free cash flow forecast relative to adjusted EBITDA.
