Global Payments announces Heartland progress
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In its Q1 2016 earnings call, Global Payments Inc., a US-based processor, gave some updates on its acquisition of Heartland Payment Systems, the sixth-largest US processor. The $4.3 billion acquisition, which was announced in December, is expected to close later in April. Together, the companies hope to generate more than $3 billion of net revenue annually.
Heartland will help continue to accelerate Global Payments’ growth. The firm’s net revenue increased by 6% year-over-year (YoY) in Q1 2016. And Global Payments also widened its margins in every region worldwide, with particularly strong growth in North America. Global Payments believes that Heartland's history of success will help the firm add $80 million-100 million to its revenues next year.
That’s because Heartland is strong in areas where Global Payments is trying to improve.
- Expansion: Heartland will help Global Payments expand its reach through 300,000 added merchants. And the acquisition has the potential to increase Global Payments transactions nearly 50% pro forma, which could help the firms grow returns across regions.
- OpenEdge: OpenEdge, Global Payments’ integrated payments segment, has seen growth in the mid-to-high teens, but doesn't have more than 20% penetration into any of its merchant segments, according to Global Payments president and COO David Mangum. Heartland’s strong presence in the restaurant, hospitality, and education sectors could give Global Payments new markets to tackle.
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