NCR steps into payments with $184m JetPay acquisition
NCR Corporation has announced a definitive agreement to acquire JetPay, a US-based provider of end-to-end payment processing and human capital management solutions.
The transaction will be a cash tender offer of $5.05 per JetPay share, which represents a multiple of 2.9 times 2018 consensus revenue forecast of $63.4 million. The purchase price is approximately $184 million and will be financed with a combination of cash on hand and existing capacity under NCR’s revolving credit facility. The offer has been approved by each company’s board of directors.
This acquisition will enable NCR to integrate a cloud-based payments platform into its enterprise point of sale (POS) solutions for retail and hospitality industries.
“The acquisition of JetPay is a key, strategic initiative that will enable NCR to create a full, end-to-end integrated payments offering for its enterprise-wide POS customers,” says NCR’s president and CEO, Michael D. Hayford.
Diane Faro, CEO of JetPay, adds that the takeover “dramatically accelerates JetPay’s capabilities” thanks to NCR’s “footprint, brand recognition and track record of innovation”.
The transaction is anticipated to close by year-end, subject to regulatory approval and other customary closing conditions. The two companies says they anticipate “a smooth transition for customers, channel partners and employees”.
Two of JetPay’s major stockholders, Flexpoint Ford, a private equity investment firm that specialises in the financial services and healthcare industries, and Larry Stone, a long-standing executive in the payment processing industry, will tender their shares in support of the transaction.
Bank of Americal Merrill Lynch acted as the financial and strategic advisor to NCR’s board of directors in connection with the transaction.