Credit: Total System Services, Inc . TSS closed the acquisition of TransFirst. With the addition of this ace U.S. merchant solutions provider, the combined entity is now the third-largest integrated payments provider and the sixth-largest merchant acquirer in the U.S. based on revenues.
TransFirst will be merged with the acquirer's merchant businesses. The combined businesses hence cater to about 0.6 million merchant outlets in the U.S. generating $117 billion in transaction volume. Share gained 1.9% in Friday's trading session and another 0.5% after market, reflecting investor optimism over the acquisition. The acquisition was announced in February.
TransFirst's focus on partner-centric, vertically specialized distribution will accelerate the segment's growth within the highly attractive integrated payments' space. The transaction with TransFirst strengthens the company's sales and distribution network with the addition of over 1,300 partners and more than 350 sales professionals, enhancing its access to high growth, strategically attractive vertical markets such as healthcare, business to business and not for profit.
The acquisition will also enable the segment to generate 80% of revenues from direct business and be accretive in low double digits to adjusted EPS for the first full year post closing.
The addition of TransFirst thus gives a competitive edge to Total Systems with added technology, scale and distribution capabilities. Total Systems is hence well positioned to diversify its business. The company remains focused on consolidating its position in the high-growth areas of integrated payments, e-commerce and omni-channel services by capitalizing on the large and growing small- and medium-size business markets.
Total Systems' merchant acquiring services have consistently been in focus given the growth in direct businesses and higher sales productivity. The merchant acquiring portfolio continues to be bolstered by the acquisitions of FNMS, TermNet and Vanguard Payment Systems and the latest TransFirst buyout for $2.35 billion.
Total System presently carries Zacks Rank #3 (Hold). Better ranked financial transaction services are Green Dot Corporation GDOT , Equifax Inc. EFX , Heartland Payment Systems, Inc. HPY . While Green Dot sports a Zacks Ranks #1 (Strong Buy), Equifax and Heartland Payment carry Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
