Vantiv Buys Moneris US Operations

by Raymond Pucci 0

Vantiv came out the winner among several prospective buyers for Moneris USA. Since July 2016 rumors were swirling that Moneris was shopping its US operations and several interested companies were kicking the tires. According to the following, the deal will close by the end of 2016.

Vantiv, Inc. (NYSE: VNTV) announced today its agreement to acquire Moneris Solutions, Inc. (Moneris USA) from Moneris Solutions Corporation (Moneris) for $425 million USD, subject to certain adjustments. Schaumburg, IL-based Moneris USA is the U.S. subsidiary of Moneris, which is a joint investment between BMO Financial Group and Royal Bank of Canada (RBC).

Upon closing of the transaction, Vantiv will begin servicing Moneris USA’s merchants and other business relationships, including its relationship with BMO Harris Bank, which operates approximately 600 branches in the United States. Moneris USA processed approximately $12 billion in U.S. transaction volume in 2015.

“Acquiring Moneris USA will further accelerate Vantiv’s growth in key high-growth channels,” said Charles Drucker, president and chief executive officer of Vantiv. “We look forward to serving their technology and bank partners with our deep payments expertise and strong customer service.”

Vantiv, the nation’s second largest payment processor, serves more than 800,000 merchant locations and 1,400 financial institutions.

“The acquisition will enable Moneris USA to continue its successful path and provide merchants the high-level of service they’ve come to expect while leveraging Vantiv’s scale and omni-channel payments capabilities,” said Angela Brown, president and chief executive officer of Moneris. “Working together with Vantiv, Moneris will continue to support our mutual cross-border customers with a focus on innovation and service.”

The transaction is expected to close in the fourth quarter of 2016, subject to required U.S. antitrust clearance and other customary closing conditions. Vantiv will fund the transaction with cash-on-hand. Vantiv expects the acquisition to have an immaterial impact on its 2016 results and be accretive to its pro forma adjusted net income in 2017.

Vantiv has been on an acquisition path for the last several years. Count Element, Litle, and Mercury among its most recent purchases. The name of the game in merchant acquiring is volume and market size. Having a scalable service and critical mass is a critical success factor. Even better is to pick up integrated payment services companies as Vantiv has been doing. Competing on added value services is a differentiating strategy and keeps acquirers from competing simply on price, which is a race to the bottom.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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