Advanzia Bank has agreed to acquire Catella Bank’s Luxembourg card issuing operations in a deal valued at around SEK360m ($39.7m).
The deal includes fixed consideration of SEK120m ($13.2m) and an additional earn-out structure payment of around SEK240m ($26.4m).
Catella is divesting the Luxembourg card issuing operations to address its regulatory framework and inefficient capital structure, enabling to exit the consolidated situation.
Catella has decided that Advanzia Bank is the suitable entity for its customers and employees, based on various options and optimal conditions.
Catella Group CEO Knut Pedersen said: “Advanzia Bank is a strong and credible actor within the credit card operations and I feel confident our customers will be in good hands. Catella recently announced different solutions for the Wealth Management operations in both Luxembourg and Sweden.
“With this transaction Catella takes another important step towards a more efficient capital-structure and less extensive regulatory framework.”
The balance sheet total of Catella is expected to be decreased by SEK350m ($38.6m), as a result of transferring assets and liabilities to Advanzia Bank.
Catella intends to pay fixed consideration in the first quarter of 2019, while the additional earn-out by the end of same year. The banking operation of Catella is expected to be closed during next year.
Catella informed the banking business area as disposal group held for sale and the equity in banking, in conjunction with the interim report for the third quarter of this year.
Advanzia Bank CEO Roland Ludwig said: “Acquiring Catella’s credit card portfolio in Luxembourg is a perfect fit for us, as it not only complements our existing business lines, but also enables us to expand our market share.
Established in 2005, Advanzia Bank is a European online direct bank, which is specialized in providing credit cards and payment solutions.
With 1.2 million credit card customers, Advanzia provides turnkey credit card programs to the private banks and financial institutions. The bank reported a turnover of €2.3bn in 2017.