TSYS’ $2.35B Bid To Go Omni

In a Tuesday (Jan. 26) announcement, TSYS, the payments solution provider, said that it will buy TransFirst from Vista Equity Partners for roughly $2.4 billion.

According to the announcement, TransFirst, which delivers merchant solutions, has a client base of more than 235,000 small and midsized business throughout the United States. The deal gives TSYS leverage into the omnichannel arena, with scale and size enough to become the sixth-largest acquirer in the United States, as measured by top line. The combined entity will support more than 645,000 merchant outlets. Key areas of focus will include prepaid programs, issuer processing and merchant services.

In reference to the financial impact of the deal, TSYS said that the acquisition would be immediately accretive to earnings per share in the low double digits, as measured through the 12-month period projected to follow closing.

In a management transition detailed in the release, John Shlonsky, currently TransFirst president and chief executive officer, will succeed Mark Pyke in the latter’s function as senior executive VP and president of the TSYS merchant unit.

The deal is expected to close within the second quarter of this year and is being conducted through an all-cash transaction. The $2.3 billion deal eclipses, by size, the $1.4 billion takeout by TSYS of NetSpend, which, at the time of acquisition, was active in the prepaid card space and was used primarily by consumers who lack access to bank accounts. As noted by the Ledger-Enquirer, the deal just announced brings aboard about 1,000 TransFirst staffers, adding to the ranks of the roughly 10,500 employees under the existing TSYS umbrella. The entity, post-acquisition, will process about 1.2 billion transactions every year, with a consolidated $117 billion top line annually.