FINANCE

Merger creates new digital payment platform

BY Dan Berthiaume

Small-to-mid-sized retailers will have a large new option for payment processing.

Payment technology provider Global Payments is merging with TSYS, a global payments provider offering solutions across the issuing, merchant and consumer segments. The two companies have agreed to combine in an all-stock merger of equals.

The combined company will be named Global Payments and will have dual headquarters in Atlanta and Columbus, Georgia. Global Payments will conduct its issuer solutions business under the TSYS name, and NetSpend will continue to be the go-to-market name for the consumer solutions business.

Combined, Global Payments and TSYS will provide payments and software solutions to approximately 3.5 million predominantly small to mid-sized (SMB) retail locations and more than 1,300 financial institutions across more than 100 countries. TSYS will also expand Global Payments’ e-commerce and omnichannel solutions presence in the U.S.

According to Global Payments and TSYS, the new company will process in excess of 50 billion transactions annually in 38 countries physically and over 100 countries virtually, and serve nearly 3.5 million predominantly SMB retail locations globally. The combined company is expected to generate approximately $8.6 billion in annual adjusted net revenue plus network fees.

“The combination of Global Payments and TSYS establishes the leading pure-play payments technology company with unparalleled vertical market and payment software capabilities and e-commerce and omnichannel solutions, operating at scale in fast-growing markets globally,” said Jeff Sloan, CEO of Global Payments.

“In this exciting merger of equals, our new company will truly be a payments powerhouse that is perfectly poised to lead the industry in delivering merchant, issuer and consumer payments technology, solutions and service to our customers,” said M. Troy Woods, chairman, president and CEO of TSYS.

Under the terms of the merger agreement, TSYS shareholders will receive equity value for TSYS of approximately $21.5 billion. Upon closing, Global Payments shareholders will own 52% of the combined company, and TSYS shareholders will own 48% on a fully diluted basis. The merger agreement has been unanimously approved by each company’s board of directors.

The board of directors of the combined company will consist of 12 members, six of whom will be from the board of directors of Global Payments and six of whom will be from the board of directors of TSYS. Troy Woods will become chairman of the board of directors and Jeff Sloan will serve as CEO of the combined company and a board member. Cameron Bready will become president and CEO of the combined company and Paul Todd will become CFO. The executive leadership team will be comprised equally of individuals from Global Payments and TSYS.

The transaction, which is not subject to any financing conditions and expected to close in the fourth quarter of 2019, is subject to the receipt of required regulatory approvals and other customary closing conditions and the approval of shareholders of both companies.

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