TSYS merger with Atlanta-based Global Payments expected to close by end of 2019
TSYS, a Columbus-based electronic payments company, announced Tuesday that it will merge with an Atlanta-based company in a deal valued at roughly $21.5 billion.
The agreement between Global Payments and TSYS is being billed as an “all stock merger of equals,” according to a release from TSYS. Under the terms of the agreement, the combined company will be named Global Payments. The transaction is expected to close in the fourth quarter of 2019.
Global Payments shareholders will own 52% of the company, while TSYS shareholders will own 48% of the company.
The company’s 12-member board will include 6 members from the TSYS board. TSYS President and CEO Troy Woods will become Chairman of the Board of Directors, and Global Payments’ Jeff Sloan will serve as Chief Executive Officer of the combined company. The company will have dual headquarters in Columbus and Atlanta.
Despite the name change, the TSYS brand will remain in Columbus, Woods said in a phone interview Tuesday. The TSYS name is expected to remain on the Columbus headquarters and its other properties throughout the city.
“The TSYS brand will remain here,” he said.
TSYS stockholders will receive 0.8101 Global Payments shares for each share of TSYS common stock. The exchange sets TSYS stock values at a price-per-share value of $119.86, an approximately 20% premium to TSYS’ unaffected common share price as of the close of business on May 23, 2019 representing an equity value of $21.5 billion for TSYS, according to TSYS officials.
The TSYS-Global Payments merger is the third mega-deal in the payment industry this year. In January, Fiserv announced a $22 billion deal to acquire First Data Corp. In March, Fidelity National Services announced a deal to purchase WorldPay for about $35 billion.
The other large acquisitions did cause TSYS to reflect but Woods said the decision to merge with Global Payments was not reactive. The company’s similarities, proximity and prior relationship helped bring about the merger. The companies have had conversations over the last decade about working together more, Woods said.
“We want to play bigger and bigger in payments,” Woods said in a phone interview Tuesday afternoon. “We were the last two kind of independent standing payment companies ... We thought it might make sense to kind of control our destiny a little bit.”
“It’s not like we just sat down for the first time in the last forty-five days.”
The new company aims to save $300 million over three years by combining business operations, eliminating duplicate corporate and operational structures, and other changes. It’s too early to tell if, and how many, employees in Columbus would be laid off as a result.
“It will take some time to sort through that,” Woods said.
Of TSYS’ 13,000 employees, about 4,800 are based in Columbus. About 95% of those employees are issuer-related. Woods said that’s an area that the current Global Payments firm doesn’t do business in, suggesting that those Columbus employees wouldn’t be combined with an existing team or eliminated.
The move could also bring workers here. One unnamed area of Global Payment’s operations will likely move to Columbus, Woods said.
“We feel pretty good about the combination we struck,” he said. “(We) feel good about the future.”
The newly combined company is expected to generate $8.6 billion annual adjusted net revenue and process 50 billion transactions annually worldwide. Once the merger is complete, Global Payments will be one of the largest software companies with an emphasis on payments in the United States, company representatives said.
Global Payments is an Atlanta-based payment technology and software solutions company with 11,000 employees worldwide. The firm is a member of the S&P 500 with customers and partners in 32 countries in North America, Europe, the Pacific Asian region and Brazil.
TSYS generated $4 billion in revenue and processed more than 32.3 billion transactions in 2018.
This story will be updated as more information comes available.