Global Payments and TSYS announced a merger earlier Monday, the latest consolidation in the payments industry as digital payments take hold.
Putting weeks of speculation to bed, Global Payments and TSYS made it official, announcing a $21.5 billion merger of the two payments companies.
It marks the third mega-deal in the industry since the start of 2019 and underscores the changing nature of the marketplace. With digital payments growing in popularity, the industry is looking to capitalize and expand its offerings, fueling a spate of mergers. In January Fiserv announced a $22 billion deal to acquire First Data Corp. Shortly thereafter Fidelity National Services purchased WorldPay for $34 billion.
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.
