Partnerships / Acquisitions

TSYS And Global Payments: The Details Of The $21B Deal

merger ahead

For Total System Services (TSYS) and Global Payments, it’s official.

To that end, the companies said they would enter into a merger valued about $21.5 billion, marking the latest in a string of multi-billion dollar deals among global players offering a range of services and products across the payments landscape.

The merger follows the $34 billion deal between FIS and Worldpay that came in March and the $22 billion announcement between Fiserv and First Data that was announced in January of this year.

The TSYS/Global Payments combination is expected to be completed during the fourth quarter of this year.

The overarching strategic aim for Global Payments and TSYS, as had been among the hallmarks of the aforementioned mergers, has been to gather scale and global reach. As has been reported, Global Payments is  the third largest merchant acquirer in the United States, while TSYS is the third largest card processor in the country.

The companies said Tuesday (May 28) that, in terms of management structure, TSYS’ CEO Troy Woods will serve chairman of the board. Global Payments CEO Jeff Sloan will serve as CEO of the combined entity.

In remarks on a call held Tuesday to discuss the merger, management from both of the firms heralded the announcement as a “landmark” for a rapidly evolving payments landscape, and with an eye on offering integrated services for an ecosystem that completes 50 billion transactions annually for merchants and consumers.

Upon combining, the companies will provide payment services to as many as 3.5 million merchants and as many as 1,300 financial institutions across 100 countries, according to materials offered alongside the call — and of course is a nod toward the continuing embrace of digital payments (and where TSYS has presence in consumer-facing offerings).

Said Sloan on the call, the merger will create the “preeminent pure play focused on SMBs and leading FIs.” The companies, through their respective management on the call, said they had minimal overlap across verticals (where Global Payments serves 70 verticals and TSYS serves 50 and where, for example, TSYS has less exposure to restaurants, which are among Global Payments’ biggest verticals), and said, too that in capturing digital trends, Global Payments has presence in QR codes and digital wallets, while TSYS has presence in B2C payments, P2P payments and B2B payments. In reference to Issuer Solutions, TSYS has pointed to 614 million accounts on file, with 24 billion cardholder transactions and dominant market position in North America, Ireland and China, with market share as the second largest player in Western Europe.

Synergies should help earnings, management said on the call, with $300 million in cost synergies to be realized on an annualized basis within three years. Revenue synergies should come in at $100 million, said the companies, with 2.5 million small to medium-sided businesses (SMBs) served by Global Payments and 820,000 SMBs served by TSYS.

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