Total System Services Inc.
) declared the closure of the ProPay acquisition. The financial
details of the deal were not disclosed.
Utah-based ProPay will now operate as a wholly-owned
subsidiary of Total System. The company will function under the
leadership of Mark Pyke, who is currently the president of the
group company's Merchant Services segment.
Prior to the acquisition, ProPay was a privately-held payment
service provider. The company, with over 15 years of experience
in the financial services industry, offers user-friendly,
well-protected and reasonably priced payment solutions to various
kinds of organizations. These range from home-based entrepreneurs
to high net worth corporations.
Moreover, the company offers customized processes such as
ProPay JAK, which delivers secure mobile payments. Its payment
security solutions are specifically designed to minimize the risk
of data breach of the clients' sensitive payment data.
ProPay processes over 250,000 small merchants to tap the
market of direct selling entities. This feature, in turn, is
expected to help Total System expand its merchant acquiring
services within the small and micro-merchants' market. Direct
penetration into these large base-level markets, primarily
through the rapidly growing mobile banking services, is not only
going to enhance Total System's market position but also help
achieve its long-term target of being among the top 10 acquirers
in the world.
Total System continues to develop and enhance its processing
solutions by developing solutions and strategic acquisitions to
expand its service offerings. In April 2010, the company acquired
51% ownership of a newly formed company named First National
Merchant Solutions LLC ("FNMS") for approximately $150.5 million.
FNMS was formed under the company's joint venture with First
National Bank of Omaha (FNBO) in Omaha, Nebraska.
In January 2011, Total System had acquired the remaining 49%
of FMNS for $169.6 million. Following the completion of the
acquisition, FNMS was renamed TSYS Merchant Solutions (TMS).
Additionally, in May 2011, the company acquired TermNet Merchant
Services. Later, in October 2011, Total System announced the
merchant portfolio acquisition of Florida-based Vanguard Payment
Total System's risk-free balance sheet along with a modest
cash position and cash flow generation provide scope for capital
deployment through share repurchases and acquisitions. We believe
that the new acquisitions and joint venture deals should boost
the growth of the company.
Total System currently carries a Zacks #2 Rank (Buy). We are
maintaining a long-term 'Neutral' recommendation on the stock.
Total System's peer in the payment processing business -
Heartland Payment Systems Inc.
) - carries a Zacks #1 Rank (Strong Buy).
HEARTLAND PAYMT (HPY): Free Stock Analysis
TOTAL SYS SVC (TSS): Free Stock Analysis
To read this article on Zacks.com click here.