M&A Continues in Merchant Acquiring

by Michael Misasi 0

Heartland Payment Systems announced July 30 that the company has entered into an agreement to acquire TouchNet Information Systems for $375 million. The acquisition will be the largest in Heartland’s history. The acquisition will significantly increase the size of Heartland’s Campus Solutions business. TouchNet currently provides integrated commerce solutions to more than 600 higher-education clients.

“With the acquisition, Heartland can now offer campus business offices an end-to-end commerce solution that integrates the payment processing capabilities of Heartland into the U.Commerce payment system,” said Michael A. Lawler, president – strategic markets group of Heartland Payment Systems. “This creates new growth opportunities in a large and growing market where we have the strongest franchise, and the leading share. As a result of the acquisition, Heartland Campus Solutions will have relationships with higher-education institutions from the smallest to the largest, which we believe provides entrée to expand all of our Campus Solutions products across this broad portfolio. As a result, we believe our Campus Solutions business can sustain attractive revenue growth rates and use our scale to expand already attractive margins over time.”

Merchant acquiring M&A has been particularly strong during the last couple of years and integrated payment solutions have often been of particular interest. Acquirers continue to fend of margin pressure by expanding their services, accessing new distribution channels, and entering new verticals. Companies similar to TouchPoint that operate in other verticals such as healthcare, gaming, fundraising and property management might still find themselves pursued by traditional acquires.

Overview by Michael Misasi, Senior Analyst, Credit Advisory Services

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