Global Payments Goes Camping in Its Quest for New Integrated-Payments Partners

Merchant acquirer Global Payments Inc. is teaming up with yet another company owned by private-equity firm Vista Equity Partners as it looks for new opportunities to integrate payment processing with software providers serving a wide range of businesses.

Last week, Atlanta-based Global announced a deal with RA Outdoors LLC, which does business as Aspira, under which it will provide payment services. Dallas-based Aspira provides software for campground reservations and other management tasks, and for hunting, fishing, and recreational-vehicle licensing.

“This is the third Vista portfolio company to select Global Payments as its partner in as many quarters,” Global chief executive Jeffrey S. Sloan said on a May 3 conference call with analysts to review first-quarter financial results. “As we discussed in our February [earnings] call, we continue to invest in leading-edge technologies to accelerate growth of product distribution and to provide seamless connectivity to our customers and partners in an increasingly complex world.”

Last September, Global Payments bought from Vista two major units of the Active Network, a provider of management software for event sponsors, for $1.2 billion. Global also gained access to Vista’s approximately 45 portfolio companies as the private-equity firm’s preferred payments partner, opening a door for it to offer integrated payments to business-management software developers.

The first such deal beyond Active was announced in November with DealerSocket Inc., which provides customer-relationship management software to more than 2,000 automobile dealers, most of them independents. The second came in February and involved Gather Technologies Inc., a hospitality and event-management software-as-a-service business.

The DealerSocket, Gather, and Aspira partnerships are not yet contributing to Global Payments’ transaction volume. “These are all setups for future growth and enhancing future growth, and some level locking in future growth for either our integrated-payments business or our pure payments businesses, depending on what’s the right solution for the software technology that Vista portfolio company has,” company president and chief operating officer David E. Mangum said on the call. 

Global Payments reported first-quarter revenues of $795 million, down from $919.8 million a year earlier as a result of an accounting change involving customer contracts. Revenues adjusted for that change plus network fees rose 17% to $924.3 million from the year earlier’s $787.7 million. North American adjusted revenues rose 17%. But revenues from the company’s wholesale business—the volume it gets through independent sales organizations—declined by a high-single-digit percentage from a year earlier, which executives said was in line with their expectations.

Net income jumped 87% to $91.4 million from $48.8 million in 2017’s first quarter, partly as a result of growth in higher-margin ISV volume. Global raised its financial outlook for 2018 and now expects adjusted revenues to come in 13% to 15% higher than 2017’s, and earnings per share to rise 25% to 30%.