Payment technology companies Global Payments (NYSE:GPN) and Total System Services (NYSE:TSS) have agreed on a stock merger of equals.
Jeffrey Sloan, the chief executive of Global Payments, will run the combined company worth roughly $40 billion, according to the sources. Shareholders of Total System Services will receive 48% of the merged firm.
"The pace of change in the industry driven by innovation in technology, coupled with the need to have additional scale, had made this deal a function of a matter of time," said Sloan.
Combined, Global Payments and TSYS will provide cutting edge payments and software solutions to approximately 3.5 million predominantly small to mid-sized (SMB) merchant locations and more than 1,300 financial institutions across more than 100 countries.
TSYS will also substantially expand Global Payments’ ecommerce and omnichannel solutions presence in the United States and provide further opportunities for meaningful multinational omnichannel market share gains.
Finally, Global Payments will have exposure to some of the fastest growing digital payments trends through TSYS’ issuer and consumer solutions businesses.
Some media outlets reported last week that the Global Payments was nearing a deal to acquire Total System Services for about $20 billion.
The consolidation comes as established financial companies seek to compete with new technology players, like Square (NYSE:SQ) and PayPal (NASDAQ:PYPL), which offer technology-driven services.
Last year, venture capital funding for payments and processing grew to a total $18.5 billion — an almost fivefold increase from a year earlier.
Shares in GPN hesitated 25 cents to $153.19, while TSYS shares skyrocketed $8.70, or 7.7% to $122.15
