NCR Corporation has agreed to acquire end-to-end payment processing and human capital management company JetPay.
The deal will be approximately $184m, with the cash tender offer being $5.05 per JetPay share. This offer represents a 2.9 times 2018 consensus revenue forecast of $63.4m.
NCR will finance the deal through a mix of cash on hand and existing capacity under its revolving credit facility.
Flexpoint Ford and Larry Stone, two of JetPay’s major shareholders, have agreed to tender their shares for the deal.
Through the acquisition, NCR will be able to integrate enterprise POS solutions to retail and hospitality players. It will also support the firm’s recurring revenue growth and expand margins by expanding its mix of software and services.
US-based JetPay offers a range of payment processing tools including POS terminals, EMV, gift cards, digital terminals, recurring payments, e-commerce transactions, and mobile payments, among others.
The company also provides HR and payroll tools to help businesses with tasks such as hiring, onboarding, payroll and tax filing, benefit administration and time tracking.
JetPay CEO Diane Faro said, “This combination dramatically accelerates our capabilities across these initiatives. NCR’s global footprint, brand recognition and track record of innovation will help us accelerate our strategic objectives and create even more value for our customers.”
This deal is expected to close by the end of the year.
BofA Merrill Lynch served as the financial and strategic advisor to NCR and Financial Technology Partners and FTP Securities acted as the financial and strategic advisor to JetPay.
“NCR’s acquisition of JetPay reflects an important trend in consolidation in the payments ecosystem. This acquisition allows NCR to couple stickier, feature-rich POS and payment acceptance applications with payment processing,” said Rivka Gewirtz Little, Research Director, Worldwide Payment Strategies, IDC.
“Additionally, both NCR and JetPay have provided services to the SMB market where retailers are likely to be open for the adoption of a unified POS and payments processing offering. This consolidated offering means maintaining simpler relationships with fewer vendors without compromising on features.”
NCR is a banking and commerce solution developer which deploys a number of payment software and hardware to enterprises spanning finance, retail, hospitality and travel, among others.
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