- Payment tech company Global Payments announced it is acquiring Total System Services (TSYS) for $21.5 billion
- Global Payments CEO Jeff Sloan is going to become CEO of the combined company and TSYS CEO Troy Woods will become chairman of the board.
Payment tech company Global Payments Inc recently announced it is buying a global payments provider that offers innovative solutions across the issuing, merchant, and consumer segments called Total System Services, Inc. (known as TSYS) in an all-stock deal that is valued at $21.5 billion.
Global Payments CEO Jeff Sloan is going to become CEO of the combined company and TSYS CEO Troy Woods will become chairman of the board. And Cameron Bready is going to become President and Chief Operating Officer of the combined company and Paul Todd is becoming Chief Financial Officer. The combined company will have dual headquarters in Atlanta and Columbus, Georgia.
Going forward, the combined company will be called Global Payments. The acquisition is expected to be closed in Q4 2019. And the combined company will have a massive reach, which will enable them to expand its e-commerce offerings in the US.
Global Payments said that the payment and software services will be available to 3.5 million merchants, mostly small- and medium-sized businesses (SMBs) and over 1,300 financial institutions across more than 100 countries.
“The combination of Global Payments and TSYS establishes the leading pure play payments technology company with unparalleled vertical market and payment software capabilities and ecommerce and omnichannel solutions, operating at scale in fast growing markets globally,” said Jeff Sloan, Chief Executive Officer of Global Payments. “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.” Sloan continued, “We could not be more excited about the future as we bring together two industry leaders with strong businesses and cultures that will generate significant opportunities for our employees, customers, partners and shareholders worldwide.”
Upon the deal closing, Global Payments is going to be processing in excess of 50 billion transactions annually in 38 countries and over 100 countries virtually. And Global Payments will have a leading position in integrated payments as TSYS’ exposure to 50 plus vertical markets are complementary with OpenEdge’s presence in 70 plus vertical markets today.
“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,” added Troy Woods — Chairman, President and Chief Executive Officer of TSYS. “Our companies share common values, a strong culture of putting people first, and a relentless commitment to doing the right thing, making this combination the perfect fit. The entire TSYS team is proud to link arms with Global Payments, and we look forward to leading the market as the preeminent payment solutions provider.”
The combined company will also significantly enhance financial strength and flexibility with expected pro forma adjusted net revenues plus network fees of about $8.6 billion, adjusted EBITDA of approximately $3.5 billion, and approximately $2.5 billion of adjusted free cash flow with expected investment grade credit ratings.
“It has been my honor to serve as Lead Director and then Chairman of Global Payments since its IPO in 2001. I am delighted with the agreed partnership with TSYS, which I believe combines the two best payments technology companies worldwide. Their future is very bright, and I look forward to continuing to contribute to their board,” explained Global Payments chairman William I Jacobs.
The combination of the companies are expected to deliver at least $300 million of annual run-rate cost synergies through combining business operations, aligning go-to-market strategies, streamlining technology infrastructure, eliminating duplicative corporate/operational structures, and scaling efficiencies. Plus the annual run-rate revenue synergies are expected to be at least $100 million mainly from significant opportunities to cross-sell complementary technology solutions through the combined direct distribution network. These synergies are expected to happen within three years.
