Metro Atlanta-based payment processor Global Payments said Tuesday it will acquire rival Heartland Payment Systems in a $4.3 billion cash and stock deal that Global said would expand its reach among small- to mid-sized companies.
Reports of a possible deal have surfaced in recent days. In New Jersey-based Heartland, Global adds smaller merchants to its customer roster, as well as payroll services. The combined company would have some 2.5 million merchant customers.
Georgia is a financial technology powerhouse, with nearly three quarters of all debit, credit and gift card transactions passing through the systems of companies based or with significant operations here, according to the American Transaction Processors Coalition. State and local leaders have recently made recruiting payments firms and helping them grow as a top job creation and retention priority.
The importance of the payments industry has only grown as consumers transact more of their purchases online and with plastic rather than cash and checks.
Global is based in Sandy Springs and Heartland also has operations in the metro Atlanta area.
“This partnership with Heartland marks a major milestone for our company, significantly enhancing our direct presence in our largest market and transforming Global Payments into the leading provider of integrated payments technology solutions in the world,” Global CEO Jeffrey S. Sloan said in a news release. “The combination of strong businesses and cultures in high growth markets will generate exceptional opportunities for our employees, customers, partners and shareholders worldwide.”
As with many mergers, one of the outcomes will be cost cutting as the businesses are aligned. The announcement said companies expect $50 million in cost savings in the first year and $125 million annually after that. The deal is expected to close in the fourth quarter of Global’s fiscal 2016.
Global also said Tuesday its second quarter fiscal 2016 results included a 4 percent increase in revenue to $722 million versus the same quarter a year ago.