Global Payments Inc. (GPN), a global service provider of electronic payments, entered into a definitive agreement to acquire Ezi Holdings Pty Ltd (Ezidebit), a dominant integrated payments company. The acquisition is expected to boost its operations in the Asia-Pacific region.
Per the agreement, Global Payments will pay AU$305 million for the acquisition. The deal is expected to conclude in the second quarter of Global Payments’ 2015 fiscal year, subject to regulatory approvals in Australia and the completion of customary closing conditions.
Ezidebit specializes in recurring payment verticals in New Zealand and Australia. The acquisition is in tune with the company’s strategy of deepening distribution channels across vertical market segments and strengthening its breadth of integrated payment processing solutions via acquisitions.
Global Payments previously acquired Accelerated Payment Technologies in 2012 and Payment Processing, Inc. (PayPros) in January this year, looking to leverage their wide network of technology-based enterprise software partners.
With this deal, Global Payments will have access to Ezidebit’s established network of integrated software vendors. The expected synergies from the acquisition are likely to translate into accelerated growth opportunities as the company explores new, lucrative payment markets. Also, the company will be well placed to capitalize on the growth prospects in the fast-growing Asia Pacific region.
The integration of Global Payments’ technology and integrated payments capabilities with Ezidebit’s technology-based, direct distribution solutions augur well for expanding the former’s global footprint by exploiting new markets.
For the partial year of fiscal 2015, Global Payments expects the acquisition to add roughly $25 million to revenues and be marginally accretive to the company’s cash operating margins. However, the deal is expected to be dilutive to fiscal 2015 GAAP earnings per share.
Global Payments currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Financial Transaction Services industry that warrant a look include Green Dot Corporation (GDOT), Vantiv, Inc. (VNTV) and Alliance Data Systems Corporation (ADS). While Green Dot and Vantiv sport a Zacks Rank #1 (Strong Buy), Alliance Data carries a Zacks Rank #2 (Buy).
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