Global Payments has reportedly completed the acquisition of the communities and sports divisions of ACTIVE Network, according to a release from the company this week and a news item via Nasdaq. The deal was funded in cash and stock; and Global Payments reportedly used its revolving credit facility to fund the cash consideration of US$600 million.
Full terms of the transaction were not disclosed in the release from Global Payments; although it is understood to be in the region of US$1.2 billion, including a tax asset. Net of the tax asset, the effective purchase price is approximately US$1.0 billion.
The release on Nasdaq noted that ‘This acquisition will be highly complementary to Global Payments’ gaming business and will expand its existing suite of innovative products and solutions.’ For the third quarter of 2017, the company expects ACTIVE Network to contribute revenues in the range of nearly US$13 million to US$14 million but have no impact on earnings.
Global Payments is a leading worldwide provider of payment technology services. An agreement to acquire the communities and sports divisions of ACTIVE Network from Vista Equity Partners was announced this August. ACTIVE Network delivers cloud-based, enterprise software, including payment technology solutions, to event organizers in the communities and health and fitness verticals. The outdoors division of ACTIVE Network will reportedly be retained by Vista Equity Partners.
Leading private equity firm Vista Equity Partners, which holds investments in software, data and technology-enabled businesses, originally acquired ACTIVE in 2013. At that time, the deal was ‘an all cash transaction valued at approximately US$1.05 billion.’
“ACTIVE Network aligns perfectly with our technology-enabled, software driven strategy and complements our existing businesses well,” said Jeff Sloan, Global Payments’ Chief Executive Officer. “With ACTIVE Network, we are adding an enterprise software business operating in two new vertical markets that are highly fragmented and underpenetrated with attractive growth fundamentals.”
Sloan continued, “We also are delighted to enter into a strategic partnership with Vista Equity Partners to provide payment technology expertise to their portfolio of companies. This represents a unique and exciting opportunity to integrate our distinctive payment technologies with a number of leading enterprise software companies to enhance their solutions and drive further market share gains.”
Robert Smith, Founder, Chairman and CEO of Vista Equity Partners, added, “I am pleased to announce this acquisition and Vista’s strategic partnership with Global Payments. I am confident that Global Payments will be the ideal partner to extend and expand ACTIVE Network’s global reach and scale, as well as offer innovative and differentiated payment technology solutions worldwide to our portfolio companies going forward.”
Under the terms of the acquisition agreement, Global Payments will acquire the communities and sports divisions of ACTIVE Network from Vista Equity Partners in a stock and cash transaction valued at approximately US$1.2 billion, including a tax asset. Net of the tax asset, the effective purchase price is approximately US$1.0 billion. Vista will receive US$600 million of Global Payments’ stock and US$600 million in cash as consideration.
Global Payments will finance the cash portion with its existing credit facility and cash on hand. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to formally close in the fourth quarter of 2017. Global Payments expects the transaction to ‘have an immaterial impact on 2017 adjusted earnings per share results.’
The report on Nasdaq adds that Global Payments is ‘riding high on inorganic growth’. As a leading provider of merchant acquiring and payment technology services, it has successfully closed a number of acquisitions along with several alliances and joint ventures in the past. These led to a revenue CAGR (compound annual growth rate) of 12.5% between 2006 and 2016.
One of its major acquisitions was that of Heartland Payment Systems, valued at US$3.9 billion (closed last year), in its North America segment. ‘The deal accelerated growth by broadening Global Payments’ direct distribution channels in the United States and enhancing its vertical markets exposure.’
Its other recent successful acquisitions include the assets of FIS Gaming Business, Pay and Shop Limited, Ezidebit, PayPros and eWay.
Global Payments (NYSE: GPN) is a leading worldwide provider of payment technology services. It provides a broad range of products and services that allow customers to accept all payment types across a variety of distribution channels in many markets around the world.
Headquartered in Atlanta, Georgia, with more than 10,000 employees worldwide, Global Payments is a member of the S&P 500, with merchants and partners in 30 countries throughout North America, Europe, the Asia-Pacific region and Brazil.