First American is a privately-owned large-scale payment processor that facilitates payments in-store and online. It provides tools and solutions to merchants and partners that help people navigate the various payment channels.
With the purchase of First American, Deluxe is anticipating it will double the annual revenue of its payments unit and establish the company as a leader in the payments industry.
The acquisition is part of its One Deluxe strategy, and the pro forma annual recurring revenue of more than $600 million from the combined entity’s payments units will help further cement Deluxe’s leadership in the payments space.
Barry McCarthy, president and CEO of Deluxe, said in a press release that the acquisition of First American is part of its overall transformation and is “a major, logical and responsible next step” as digital payments continue to become a central tenet of the economy.
“The addition of First American’s independent, leading payments platform will advance our One Deluxe strategy and our overall growth trajectory,” McCarthy said.
He added that Deluxe processes in excess of $2.8 trillion payments annually and is an “integral part” of the payments space. With First American’s platform, McCarthy said he sees “significant cross-sell opportunities” that will benefit shareholders.
The management teams of both companies will combine and Neil Randel, First American CEO, will become the managing director of merchant services. The acquisition represents the biggest transaction in the 106-year history of Deluxe.
In an “On the Agenda” webcast with PYMNTS Karen Webster, McCarthy said that payment options could bridge paper and digital payments. He said that more than 40 percent of B2B payments are still being done with paper processes, which represents a big opportunity for digital.