Global Payments has agreed to acquire payments technology services provider Heartland Payment Systems for $4.3 billion in cash and stock, or $100 per share. Upon closing the deal, Global Payments seeks to expand its reach and distribution among small and medium-sized (SMB) businesses.
The combined company will provide payments solutions to nearly 2.5 million merchants worldwide, which expect to generate more than $3 billion in total revenue. The transaction is still subject to regulatory approval and customary closing conditions, as well as approval by Heartland’s shareholders. The parties expect the merger to close by May 2016.
Global Payments plans to combine its OpenEdge partner integration, network and marketing capabilities with Heartland’s technology expertise. In addition, Global Payments will leverage Heartland’s product and sales capabilities globally through direct distribution in 29 countries.
Specifically, Global Payments looks to cross-sell Heartland’s POS, payroll, loyalty and gift solutions into Global Payments’ core U.S. and international markets, as well as Heartland’s existing vertical markets such as hospitality and education.
“This partnership with Heartland marks a major milestone for our company, significantly enhancing our direct presence in our largest market,” said Jeffrey Sloan, CEO of Global Payments. “The combination of strong businesses and cultures in high growth markets will generate exceptional opportunities for our employees, customers, partners and shareholders worldwide.”
Heartland Operations To Remain ‘Business As Usual’ As Founder Carr Steps Down
Upon closing, Heartland will continue operating under its namesake brand in the U.S. The company will function on a “business as usual” basis until the transaction closes, with integration plans expected to be developed in the coming weeks and months.
Bob Carr, the CEO and Founder of Heartland Payment Systems, will not continue in his leadership role, according to an internal message to company employees.
In addition to unveiling the acquisition, Global Payments reported quarterly revenue increases of 5% to $518 million, compared to $494 million last year. The payments provider increased its quarterly cash earnings per share 15% to $0.76.