Global Payments Inc.’s (NYSE: GPN) acquisition of Zego from Vista Equity Partners in June expanded its reach to a new vertical, residential property management. Zego is a real estate technology company that provides resident experience management software and digital commerce services to property managers primarily in the United States. An electronics payment processing company, Global Payments’ verticals include retail, restaurant, healthcare, financial services, education and gaming, among others.
Low Risk Entry Point
The acquisition is consistent with Global Payments’ long-term strategy to expand globally by leveraging its core competencies across new verticals. It gained a relatively low-risk entry point to a new vertical and, potentially, a large global opportunity.
Zego has over 7,000 property management customers representing more than 11 million residential units in the U.S. It also facilitates approximately $30 billion in payments annually through its integrated payments offering.
Global Payments acquired Zego in an all-cash transaction valued at $925 million, inclusive of a tax asset. The effective purchase price is approximately $830 million, net of the tax asset.
The cost of the acquisition, while substantial, represents a relatively small percentage of its market cap and revenues. Global Payments is a Fortune 500 company and a member of the S&P 500. Its payments technology is used in 170 countries throughout North America, Europe, Asia Pacific and Latin America.
Modern Residential Property Management
The deal broadens and deepens Global Payments’ product portfolio and puts a strong, well-capitalized, and closely aligned force behind Zego as it builds out its market in modern residential property management. Zego may leverage Global Payments’ global presence to expand internationally.
For more Deals of the Year coverage, see Mergers and Acquisitions Reveals the 2022 Middle-Market Deals of the Year.