Vantiv Inc. (NYSE: VNTV) has reached a deal with payment processor Moneris Solutions Corp. to acquire the seller’s U.S. business, Moneris USA. The deal is expected to close by year-end 2016 and values the target at approximately $425 million.
Moneris USA is a Schaumburg, Illinois-based provider of payment processing services. The target sells gift card packages, standalone and mobile point-of-sale hardware, and payment processing software. Moneris USA was established in 2000 as the U.S. subsidiary of Moneris Solutions, a joint investment between BMO Financial Group (NYSE: BMO) and Royal Bank of Canada. The target processed nearly $12 billion in 2015.
As part of the deal, Vantiv will service the target’s merchants and other business relationships, including BMO Harris Bank’s 600 U.S. branches. "Acquiring Moneris USA will further accelerate Vantiv's growth in key high-growth channels," states Vantiv CEO Charles Drucker.
Vantiv, headquartered in Cincinnati, Ohio, is also a credit card processing and merchant service provider. The buyer's client list consists of retail stores, law firms, hotels and health clubs, contractors, restaurants, and small businesses. Vantiv boasts more than 800,000 merchant locations and 1,400 financial institutions as its clients. The buyer will fund the strategic deal in cash.
Vantiv's purchase of Moneris USA comes as retailers have begun upgrading their systems to stay current with changing payment trends. Retailers are shifting towards chip-enabled cards while gas stations have an Oct. 2017 deadline from card providers to upgrade to the new system. In June 2016, Dover Corp. (NYSE: DOV) announced plans to buy Wayne Fueling Systems Ltd., a provider of equipment and payment systems for gas stations under the Helix brand from Riverstone Holdings LLC for $780 million. Other deals include: Wex, a fleet card provider, buying Benaissance; and payment processing tech provider Heartland Payment Systems’ purchase of Beanstalk Data to serve smaller merchants and restaurants.
Credit Suisse (NYSE: CS), Morgan Stanley & Co. LLC (NYSE: MS) and BofA Merrill Lynch (NYSE: BAC) are serving as financial advisers to Vantiv, while Benesch Friedlander Coplan & Aronoff LLP is acting as legal adviser. BMO Capital Markets and RBC Capital Markets LLC are acting as financial advisers to Moneris, while Sullivan and Cromwell LLP is serving as legal adviser.