Recently, Heartland Payment Systems, Inc. HPY inked an agreement with Global Payments Inc. GPN per which, the latter is slated to acquire the former in a cash and stock deal worth $4.3 billion. Subsequent to this announcement, shares of Heartland jumped 2.82% with optimism over the merger.
Heartland Payment is scheduled to be acquired by May 2016, which happens to be the fiscal fourth quarter of 2016 for Global Payments. The aggregate value of the deal is $4.3 billion, which comprises 0.6687 shares of Global Payments and $53.28 per Heartland share. On closing, Global Payment’s shareholders will own 84% stake in the combined entity. The merger has been approved by Board of Directors of both the companies. Nevertheless, Heartland Payments will continue to operate under its brand name and under its business model for fair dealing.
Heartland Payment’s strong direct sales and technology-led distribution channels are expected to complement Global Payment’s exiting operations. The resultant combined entity will become one of the largest payments solutions that will cater to 2.5 million merchants globally. Strong expertise and increased scale is expected to help the combined company generate adjusted net revenues of more than $3 billion and EBITDA of $1 billion annually.
Heartland Payment currently holds a Zacks Rank #2 (Buy). Other stocks from the financial transaction services space that appear impressive are Fiserv, Inc. FISV and Total System Services, Inc. TSS. Both stocks carry the same Zacks Rank as Heartland Payment.
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