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The Buyside:
Global Payments Signs Deal in Midst of Growing Competition

Great Hill Partners sells Accelerated Payment Technologies for $413M

Consider Global Payments Inc. (NYSE: GPN) to be the latest mobile-payments company to up its game through dealmaking, as a growing list of rivals looks to capitalize on smartphone technology being used for making purchases at retail outlets.

The Atlanta-based acquirer agreed to a $413 million deal with payments technology company Accelerated Payment Technologies (APT) as a means to grow in an increasingly competitive market.

The transaction is expected to help Global compete with the likes of Google Inc. (Nasdaq: GOOG), Intuit Inc. (Nasdaq: Intu), PayPal, and San Jose terminal maker VeriFone Systems Inc. — all of which have recently launched mobile payment technologies and are actively involved in M&A talks.

PayPal, for example, bought card.io, a supplier of technology that allows developers to scan credit-card info by using a phone’s camera, in July. It has also been reported that the eBay Inc. (Nasdaq: EBAY) subsidiary offered to buy Square, a mobile-payment startup in San Francisco, as part of a “digital wallet” initiative.

Retailers have also been getting into the mix. On Aug. 8, Starbucks Coffee Co. (Nasdaq: SBUX) invested $25 million in Square as part of a new partnership agreement that allows customers of the Seattle, Wash.-based coffee chain to use a payer application in all of its stores.

Looking to cash in on the trend was Great Hill Partners, a Boston-based private equity firm that had originally acquired APT in August 2008. APT, headquartered in Pleasant Grove, Utah, currently offers payments solutions to more than 30,000 businesses in the U.S. and produces roughly $8 billion in annual card volume.

The target’s client base includes various merchants, specifically in the medical and healthcare market, including dental, pharmacy and veterinary services.

The acquisition was also announced on the heels of Global’s acquiring the remaining 44 percent stake in its Asian-Pacific joint venture, Global Payments Asia Pacific Ltd., for $242 million.

Both transactions come in the midst of mounting pressure from Global shareholders and customers. In July, Global reported that fiscal fourth-quarter earnings dived 91 percent due to the company’s spending $84.4 million to fix a security breach that occurred in March.

The APT deal is slated to close during the fiscal second quarter of 2013.

 

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