Total System to Boost Payment Solutions With Cayan Buyout
Total System Services, Inc TSS recently inked a deal valued nearly $1.05 billion with Parthenon Capital Partners to acquire payment technology company Cayan in an all cash transaction. The deal is subject to customary closing conditions and expected to be closed in the first quarter of 2018.
The Columbus, Georgia-based payments provider,Total System has grown significantly over the years through a number of strategic acquisitions. The acquisition of NetSpend in July 2013 and TransFirst in 2016 have substantially boosted the company’s top line and margins. The buyout of Cayan is likely to be accretive to Total System’s net revenue growth and adjusted diluted earnings per share in 2018.
Year to date, shares of Total System have gained 61.1%, significantly outperforming the Zacks Financial Transaction Services industry’s rally of 38.3%.
Boston-based Cayan is engaged in providing integrated payment solutions and merchant acquiring services. The company was sold to Parthenon Capital Partners in 2012, and now more than 70,000 merchants use its payments and customer acquisition technology.
Both the companies are committed to providing cutting-edge payment solutions and a wide product offering to merchants in the United States. Hence, the buyout is going to offer more payment processing and customer engagement products to small and medium businesses. The deal will enable Total System to serve nearly 730,000 merchant sites with an annual processing volume of more than $138 billion.
Management believes that the buyout would complement Total System’s merchant goals to deliver premium quality services and solutions. The transaction would further strengthen its huge scale and distribution capabilities.
Zacks Rank & Other Stocks to Consider
Total Systems carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the Payments space can also consider stocks like Western Union Company WU, Visa Inc V and Green Dot Corporation GDOT. All of these stocks also carry a Zacks Rank #2.
Western Union delivered positive surprises in three of the last four quarters with an average beat of 9.1%.
Visa delivered positive surprises in each of the last four quarters with an average beat of 8.1%.
Green Dot delivered positive surprises in each of the last four quarters with an average beat of 27%.
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