Contact: Scott Denne Jordan McKee
Amid a slowdown in its growth, Vantiv picks up payment technology processor Mercury Payment Systems for $1.65bn in a bid to boost its integrated payment offerings. This is Vantiv’s second acquisition of an integrated payments company in less than a year, a reflection of the importance of this emerging corner of the point-of-sale (POS) market.
Founded just over a decade ago, Mercury sells integrated payment-processing services that are built to connect with other business software, such as CRM or accounting systems. As more software becomes available to SMBs, more of them are exchanging isolated payment systems (where Vantiv’s roots lie) for integrated payments. Not only is this trend likely to accelerate as tablets and mobile devices gain a larger footprint in POS systems, but integrating payments with other systems will make it less likely that customers would replace Vantiv/Mercury. Vantiv first got into integrated payments with its $162.5m purchase of Element Payment Services in July.
While Vantiv’s revenue grew 14% in 2013, the company expects to post just single-digit percentage growth in 2014, so gaining a bigger stake in an expanding market like integrated payments is an attractive proposition. The deal also provides Vantiv with a new channel to target SMBs, as Mercury sells its services through software developers and a network of local POS distributors.
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