In the latest game of “who will merge in the payments space,” Bloomberg reported Thursday (Dec. 10) that Global Payments may buy its smaller rival, Heartland Payment Systems.
The newswire reported that “people with knowledge of” the possible deal say an agreement could be announced as soon as this month, though talks are still ongoing. The deal, if it does indeed crystallize, would be the one of the more visible ones in an industry that has seen the consolidation of card processing companies on the continued wave of mobile payments growth around the globe. As has been widely reported, French outfit Atos SE has been “considering” an offer for U.S.-based EVO Payments International, and earlier this year, Worldpay Group was barraged by offers from Ingenico and Wirecard before being taken private.
Shares of both Heartland and Global Payments reacted positively on the news, up 22 percent and 7 percent, respectively. A deal would bring together two of the biggest payments processors in the U.S. In terms of global scope, the impact is a bit smaller, with Heartland having 2.1 percent of global transactions compared to Global Payments at 2.9 percent, Bloomberg said, quoting The Nilson Report, a trade publication.
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If there is indeed a transaction, Global Payments would get to move beyond its strongholds in Europe and into the U.S., with additional broadening-out into industries such as restaurant and retailing, an analyst told the newswire. And the sales model would become one that is more direct.
Bloomberg reported previously that Global Payments would be interested in buying companies for new technologies or new geographies, as the company’s CFO, Cameron Bready, noted in remarks at an investor conference held in New York earlier this month. The Heartland deal would seem to clear several of those hurdles.