Cielo Enhances Ecommerce Offering with Merchant E-Solutions Merger

by Mercator Advisory Group 0

In an acquisition deal announced July 2, Brazil-based merchant service provider Cielo revealed that it will buy Merchant e-Solutions, commonly referred to as MeS, of Redwood City, Calif. for $670 million.

MeS markets and sells a proprietary card-not-present payment gateway to ecommerce and multichannel merchants directly and through its network of agents and partners. Cielo will integrate MeS’ technology and expertise in the ecommerce space with its own processing capabilities in the Brazilian market.

Plans to re-brand the acquisition, or more broadly, enter the U.S. market under the corporate brand were not stated. The deal was worth some more than five times the revenue MeS earned in the fiscal year ended May 31.

From New York Times DealBook:

For Cielo, bringing the MeS platform to Brazil will allow it to “offer complete end-to-end service” for both the retail and e-commerce sector, it said. Along with main competitor Redecard, it is expected to face stiffer competition as technology plays a larger role in the sector.

Eduardo Chedid, Cielo’s vice president of business development, explained on a conference call with investors on Monday why it bought the entire company and not just the technology, saying, “We need to not only acquire the platform but really understand it and change it to make it our own.”

He said Cielo spent the last 24 months looking for platforms. Cielo expects to take the next three years to integrate MeS’s technology.

Click here to read more from the New York Times.