Banking solutions provider NCR has agreed to acquire payment processing services provider JetPay for $184m.
For the transaction, NCR has offered $5.05 per JetPay share and it is 2.9 times the revenue forecast of JetPay for this year, standing at $63.4m. The transaction has been approved by the board of directors of both the companies.
JetPay is an Allentown, Pennsylvania-based provider of solutions for card acceptance, processing, payroll, payroll tax filing, human capital management services, and other financial transactions.
It offers single vendor solution for payment services, debit and credit card processing, automated clearing house (ACH) services, and payroll and human capital management needs for businesses across the US.
It also offers vertically aligned services and customized solutions for internet, mobile, and cloud-based payments.
NCR president and CEO Michael Hayford said: “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.
“Enabling payments as part of our transactions is part of our long-term strategy to create integrated value for our clients.”
With this acquisition, NCR will be able to integrate a cloud-based payments platform into its enterprise point-of-sale (POS) solutions for retail and hospitality industries. It could also accelerate is strategy to increase revenue growth and can help in expanding its margins by enhancing its mix of software and services.
JetPay CEO Diane Faro said: “JetPay has always focused on taking great care of our customers, creating value for our stockholders, delivering innovative solutions, and expanding our market reach.
“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.”
The acquisition is expected to be closed by this year-end, subject to regulatory approval and other customary closing conditions.
Both the companies anticipate smooth transition for customers, channel partners and employees.
JetPay’s major stockholders, Flexpoint Ford, a private equity investment firm and Larry Stone, a longstanding executive in the payment processing industry, have agreed to tender their shares for this transaction.
JetPay is considered to be the first payment processor that NCR acquired in its history, although the company has partnerships with similar companies, the Atlanta Journal-Constitution reported.