NCR announced a definitive agreement to acquire US based JetPay, a provider of end-to-end payment processing.
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. It also accelerates NCR’s strategy of increasing recurring revenue growth and expanding margins by enhancing its mix of software and services.
“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,” comments Michael D. Hayford, President and Chief Executive Officer, NCR. “Enabling payments as part of our transactions is part of our long-term strategy to create integrated value for our clients.”
“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,” continues 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.”
The transaction is anticipated to close by year-end, subject to regulatory approval and other customary closing conditions.