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A $4 billion combination of two Atlanta payments firms will leave the purchaser with an even bigger international footprint.
Global Payments has already benefited from consolidation within the state, creating a mega-payment-processing firm by buying Georgia-founded TSYS, based in Columbus, in 2019.
In early August, Global Payments added further international flair to its portfolio by committing to purchase EVO Payments, which provides payment solutions to more than 50 countries in 150 currencies.
The deal, expected to no later than the first quarter of 2023, helps Global Payments “expand its presence in new and existing faster growth geographies,” bringing the company into Greece, Poland, Germany and Chile while deepening its reach into existing markets in North America, Spain, Ireland and the United Kingdom, according to a news release. Global Payments, a Fortune 500 firm, has a presence in 170 countries.
EVO, which offers both acquiring (signing up merchants) and processing (providing the back end for the transaction) also operates accounts receivable software and a variety of platform integrations that will complement its tech stack, according to a Global Payments news release.
Global Payments offered $34 per share of EVO stock, valuing the company at $4 billion; while investors holding 22 percent of shares have committed to vote in favor of the deal, it remains subject to shareholder approval.
Global Payments will use cash and a bank facility. As part of the deal, private equity fund Silver Lake will make a $1.5 billion investment in the form of convertible senior notes.
Global Payments expects immediate savings of $125 million through the combination, which the company says will contribute to growth in its earnings within a year from the closing of the deal.
EVO was founded in 1989 and has 2,400 employees serving more than 550,000 merchants around the world. With this addition, Global Payments would serve 4.5 million merchants and 1,500 financial institutions.
Global Payment posted adjusted earnings of $2.36 per share on $2.06 billion in adjusted revenues in an active second quarter in which it also agreed to divest subsidiary NetSpend’s consumer information unit, which will eventually free up $1 billion and focus the company more on its commercial customers.
In the first quarter, Global Payments exited its Russian United Card Services business, which it entered in 2009, as the war in Ukraine continued to rage.
The second-quarter performance “exceeded our expectations despite ongoing macro concerns, the exit of our Russian business and incremental headwinds from adverse foreign currency exchange rates,” said Josh Whipple, Senior Executive Vice President and Chief Financial Officer.
The company expects to report revenues between $8.48 billion and $8.5 billion for the full year.