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The big transaction processor Global Payments Inc. is set to get significantly bigger by the end of March, its top executives stressed early Friday as they underscored the importance of scale in a business in which Atlanta-based Global processed a record 64 billion-plus transactions in 2022, according to chief executive and president Jeff Sloan.
That scale will grow at a stroke with Global’s $4-billion acquisition of EVO Payments Inc., which was announced last summer and is expected to close by the end of March. The deal “will provide further scale in existing geographies,” Sloan said during a conference call with equity analysts to discuss the company’s fourth-quarter 2022 and full-year results. Indeed, Global expects EVO to contribute $475 million in adjusted net revenue in 2023, Sloan said.
But Global is also narrowing its focus by disposing of companies outside of its core merchant and issuer businesses. Sloan said the company is “on track” to sell the consumer business belonging to its NetSpend prepaid card unit by quarter’s end. The $1-billion deal was announced in August. Netspend became part of Global in 2019 as a result of the company’s $21.5-billion acquisition of Total System Services.
Global announced Friday it is also exiting the gaming business with an agreement to sell a unit specializing in processing for that niche market to Parthenon Capital Partners for $415 million. Online gaming and sports betting in particular have become hotly competitive in recent months.
But Global is also expanding into other hot markets. Sloan said the company has agreed to process ticketing and in-stadium transactions for two major Atlanta sports teams—the National Basketball Association’s Hawks and Major League Baseball’s Braves. More such deals are in the works, he hinted, adding, “our pipeline in the channel remains robust.”
For the quarter, Global’s merchant-solutions unit—which concentrates on merchant-processing services—logged $1.41 billion in revenue for the quarter, up 5.2% year-over-year, with an adjusted operating margin of 48.4%. For all of 2022, the unit delivered a 49% margin on $5.63 billion in volume, up 9.6%.
The issuer-solutions unit posted $501.3 million in revenue for the quarter, up 1.3%, with a 48.3% operating margin. For the year, it delivered $1.94 billion in volume, up 1.9%, with a 45.4% margin.
“We are pleased with where we are,” Sloan said in closing the earnings call.
