Article

Global Payments to acquire TSYS in $21.5B merger

Global Payments is buying TSYS in a merger valued at $21.5 billion, marking the latest in a series of international mergers and acquisitions of payments and POS technology companies.

May 28, 2019 by David Jones — Editor, Networld Media Group

Global Payments Inc. and Total System Services Inc. have announced an agreement to merge in a deal valued at $21.5 billion.

The combined entity will provide payments technology and software to about 3.5 million small to medium-size businesses and 1,300 financial institutions in more than 100 countries worldwide. The combined firms are expected to generate $8.6 billion in sales, plus network fees, and $3.5 billion in adjusted EBITDA on a pro-forma basis.

"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," Global Payments CEO Jeff Sloan said in the announcement. "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."

TSYS shareholders will get 0.8101 shares of Global Payments for each share of TSYS common stock, reflecting a price per share of $119.86 for each share of TSYS. The price reflects a 20% premium on TSYS shares as of the close of business on May 23.

Global Payments shareholders will own 52% of the combined firm, with TSYS shareholders owning 48% of the combined entity. Both company boards have unanimously approved the merger. The combined company will have a 12-member board, with six members from each existing company.

The combined firm will operate under the Global Payments name, but will maintain dual headquarters in Atlanta and Columbus, Georgia. The issuer solutions business will operate under the TSYS name and the consumer solutions business will operate under the go-to-market name of NetSpend.

Sloan will become CEO of the combined company. Troy Woods, chairman and CEO of TSYS, will become chairman of the combined firm. Cameron Bready, senior executive vice president and CFO of Global Payments, will become president and COO of the combined firm. Paul Todd, senior executive vice president and chief financial officer of TSYS, will be CFO of the newly merged company.

This agreement follows a series of high-profile mergers this year in the cross-border payments and technology space. According to analysts, the Global Payments-TSYS merger creates a more competitive entity that can offer customers a wide range of solutions that touch the merchant, financial institutions and issuer side of the payment card business.

"I think that the move is being driven by a few major trends," Thad Peterson, senior analyst at the Aite Group told Mobile Payments Today, via email. "The rapidly accelerating globalization of payments, the pressure from investors to remain competitive with players like FIS/Worldpay and Fiserv/First Data and the power of scale to increase margins in the payments processing space."

Cover photo: iStock

About David Jones

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David Jones is the editor of Mobile Payments Today. He is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.

Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others. He recently covered FinTech issues for PYMNTS.com.

He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation. 

He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.