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Global Payments To Merge With TSYS In $21.5 Bln All-stock Deal Of Equals

Global Payments (GPN), a leading worldwide provider of payment technology and software solutions, and TSYS (TSS), a leading global payments provider offering innovative solutions across the issuing, merchant and consumer segments, announced Tuesday that they have entered into a definitive agreement to combine in an all-stock merger of equals.

Under the terms of the merger agreement, TSYS shareholders will receive 0.8101 Global Payments shares for each share of TSYS common stock, representing an equity value for TSYS of about $21.5 billion. This reflects a price per share of $119.86 for each share of TSYS common stock, and an about 20 percent premium to TSYS' unaffected common share price as of the close of business on May 23, 2019.

Upon closing, Global Payments shareholders will own 52 percent of the combined company, and TSYS shareholders will own 48 percent on a fully diluted basis. The merger agreement has been unanimously approved by each company's Board of Directors.

The combined company is expected to have investment grade credit ratings immediately on closing based on its strong financial profile and free cash flow generation.

Upon closing, Global Payments will process in excess of 50 billion transactions annually in 38 countries physically and over 100 countries virtually, and serve nearly 3.5 million predominantly SMB merchant locations globally.

The transaction is expected to be mid-single digits accretive to adjusted earnings per share in 2020 and low double digits accretive thereafter on an operating basis. The combination is expected to deliver at least $300 million of annual run-rate cost synergies.

Upon closing, the Board of Directors of the combined company will consist of 12 members, 6 of whom will be from the Board of Directors of Global Payments and 6 of whom will be from the Board of Directors of TSYS

The combined company will be named Global Payments and will have dual headquarters in Atlanta and Columbus, Georgia. Global Payments will conduct its issuer solutions business under the TSYS name, and NetSpend will continue to be the go-to-market name for the consumer solutions business.

The transaction, which is expected to close in the fourth quarter of 2019, is subject to the receipt of required regulatory approvals and other customary closing conditions and the approval of shareholders of both companies. The transaction is not subject to any financing conditions.

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