Nxgen, Payscape, And BluePay Canada Combine to Form a Processor Serving 25,000-Plus Merchants

This year’s mega-mergers in the transaction-processing business are now starting to generate some smaller spin-off deals. On Friday, two payments providers, Nxgen International and Payscape, said they have acquired a third, BluePay Canada. Terms of the deal were not announced, and an overarching name for the tripartite company has not yet been determined.

The addition of BluePay Canada, which was formerly known as Caledon Computer Systems Inc., forms a company with annual processing volume of more than $13 billion across more than 25,000 merchants, according to figures released in the announcement.

Adam Bloomston, a Payscape co-founder and chief executive for the combined company, indicated the merger will reinforce the technology-oriented firm’s position in the business of integrating payments with merchant software, a function carried out by entities known as integrated software vendors. “With this acquisition, we demonstrate our dedication and commitment to the international ISV space,” Bloomston said in a statement. “We are quickly becoming North America’s most powerful payment facilitator platform.”

BluePay Canada brings to the merger a proprietary processing platform whose clients include both merchants and software developers. The platform supports ISVs as a payment facilitator, a designation for a company that allows third parties to recruit merchants for payment services using the company’s merchant account. The company, which also offers payment-data tokenization, processes for entities in a wide range of industries, including property management, education, subscriptions, and recurring billing.

The deal was facilitated by Boston-based Parthenon Capital, which recently took stakes in Whitefish, Mont.-based Nxgen and Atlanta-based Payscape and also backs a number of other payments companies.

This latest transaction traces its roots through a string of previous deals. In 2014, Caledon was acquired by BluePay Holdings Inc., a Naperville, Ill.-based merchant processor. Caledon was ultimately renamed BluePay Canada. Three years later, First Data Corp. bought BluePay in a $760-million deal. Then, earlier this year, Payscape and Nxgen merged in a $124-million transaction. And Fiserv Inc. acquired First Data for $22 billion in what turned out to be the first of a series of major processor mergers, and is now letting go of the Caledon business.