Long known largely as a check supplier, Deluxe has turned to positioning itself as a business technology provider with payment enablement as an important part of its growth strategy.
“This is a major, logical and responsible next step in our transformation. With electronic payments playing an increasingly important role across the economy, the addition of First American’s independent, leading payments platform will advance our One Deluxe strategy and our overall growth trajectory,” said Barry McCarthy, president and CEO of Deluxe.
“Deluxe serves an integral part of the payments industry, with our software and services processing more than $2.8 trillion annually. First American’s end-to-end payments platform presents significant cross-sell opportunities as we continue to invest in our higher growth Payments segment, and this combination will create a multitude of opportunities to drive tremendous value for our shareholders.”
First American provides payment solutions to software companies, financial institutions and independent sales organizations. Deluxe provides services for small businesses and thousands of financial institutions.
According to the announcement, the company plans to use this combination to move into new verticals, including government, non-profit and retail.
Deluxe said that the deal represents the largest transaction in its history. The company expects the acquisition to double its annual payments revenue, it said.
“Our acquisition of First American will enable Deluxe to participate in merchant services, a part of the strong secular growth payments industry,” said Michael Reed, president of payments for Deluxe.
“With this combination, Deluxe and First American customers will have access to a broader array of valuable and robust technology services and solutions. We expect to offer these merchant services to our thousands of financial institution customers, millions of small businesses and hundreds of the world’s biggest brands through our established and highly effective sales and distribution system.”
Deluxe is acquiring First American for $960 million, to be financed with secured and unsecured debt.