We have 3rd mega-deal this year in FinTech industry. TSYS + Global payment = $21.5bln.
Global Payments and TSYS made it official, announcing a $21.5 billion merger of the two payments companies.
With growing popularity of digital payments, the industry is looking to capitalise and expand its offerings, fuelling a spate of mergers. This year we've already witnessed:
Fiserv announced a $22 billion deal to acquire First Data Corp.
Fidelity National Services purchased WorldPay for $34 billion.
And now - Global Payments and TSYS. Under the terms of the deal, TSYS shareholders will receive 0.8101 Global Payments shares for each share of TSYS common stock. Global Payments shareholders will get 52% of the combined company while TSYS shareholders will own 48%. The offer price represents a 20% premium to where TSYS shares closed Friday. Troy Woods, TSYS’s Chief Executive will become chairman and Jeff Sloan, the CEO of Global Payments will continue as Chief Executive once the deal closes.
“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 Sloan in prepared remarks.
“This transformative partnership accelerates our technology-enabled, software-driven payments strategy and provides exposure into attractive and complementary businesses while enhancing our financial strength and flexibility.”
Combined, Global Payments and TSYS will provide payment services to around 3.5 million small to medium-sized merchants around the world and more than 1,300 financial institutions, spanning roughly 100 countries. TSYS will also expand Global Payments e-commerce presence in the U.S. and give it exposure to some of the fastest growing digital payment trends. TSYS operates in the credit card issuers market, ranking third in payment processing in the U.S. Global Payments is a merchant acquirer, helping small and mid-sized businesses accept and process credit and debit card payments.
With fintechs including Square and PayPal dominating the digital payments market, the traditional players have been looking at ways in. TSYS gives Global Payments that entrance.
Global Payments and TSYS said the deal will result in cost savings of at least $300 million a year due to combining operations, streamlining technology, getting rid of duplicate corporate and operational structures and aligning strategies. The company expects to realise $100 million in annual synergies by cross-selling through a combined distribution network.
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