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Shift4 Payments Inc. went public in June 2020 after more than two decades as a privately held processor, but now its senior management may be looking for greater returns via an acquisition by an outside company. Both the processing giant Fiserv Inc. and a Spain-based reservations-processing company called Amadeus could be suitors, according to a report late Wednesday by Reuters.
Fiserv did not respond to queries from Digital Transactions News regarding the Reuters report. A Shift4 spokesman said, “It’s our policy not to comment on market rumors.” Center Valley, Pa.-based Shift4’s stock was trading up 3% by mid-morning Thursday, at $88 per share. The shares reached their high point at $101 in April 2021, less than a year after the 25-year-old company went public in the low $30s.
The putative interest by potential suitors comes as Shift4 on Wednesday reported its recent $100-million acquisition of an events-payments company called Appetize from SpotOn Transact LLC was paying off with deals to process payments at sports arenas for tickets and concessions, with Yankee Stadium as a recent example.
“Definitely the [Shift4] stock has underperformed,” notes a payments-industry executive who asked not to named. “It’s one of many [companies] in the payments sector that’s undervalued.” This, he adds, is in spite of the company’s strategy to leverage its software platform both internally and with newly acquired companies. “They’ve done an impressive job,” he says.
Fiserv’s interest, he adds, may stem from the success it has had with its Clover point-of-sale system, which can function similarly to technology from Shift4 properties like Appetize. The technology, he says, allows clients to “tie into payment processing.”
“It’s very clear the public markets aren’t valuing Shift4 appropriately,” says Eric Grover, a payments consultant and proprietor of Minden, Nev.-based Intrepid Ventures.
The latest news follows a report by Bloomberg in December that Global Payments Inc. was interested in a deal for Shift4. A Global Payments spokesperson said at the time no such discussions were in progress.
Besides its domestic market, Shift4 has picked up strength in Europe with the recent close of its $525-million acquisition of the processor Finaro. The deal’s close, which had been prolonged by the need to gain the approval of a number of European regulators, now offers strong positioning to Shift4 in a massive geography.
For the company’s December quarter, Shift4 reported Wednesday results showing a 33% increase in gross revenue, to $705.4 million. For the year, revenue grew 29% to $2.56 billion. Net income for the quarter fell by half, to $19.2 million, but rose 42% on the year, to $122.9 million.
