Deluxe (NYSE: DLX) revealed on Tuesday (June 1, 2021) that it has now finalized the previously announced acquisition of First American Payment Systems for $960 million in cash.
Deluxe had first announced the transaction on April 22, 2021. With the inclusion of the First American omni-channel payments platform, Deluxe has now become a scaled and more established provider in the secular growth merchant services market.
This latest acquisition should reportedly double the revenue of the firm’s fastest-growing segment, Deluxe Payments, to approximately $600 million annually, with sizable margins. At present, Deluxe Payments accounts for around 17% of the firm’s total revenue. With First American, Payments should account for nearly 30%.
Barry C. McCarthy, President and CEO of Deluxe, stated:
“As the original payments company, this acquisition is a major, strategic, logical and responsible next step in our transformation into a Trusted Payments and Business Technology™ company.”
By adding on First American to its platform, Deluxe expects cross-selling into other verticals, such as government, not-for-profit and retail, leveraging the firm’s relationship with many different financial institutions and SMEs.
Michael Reed, President of Deluxe Payments, remarked:
“With First American, we expand our ability to help our customers pay, get paid, optimize and grow their businesses. Since our announcement, our teams have come together to identify even more exciting opportunities to bring value to customers.”
Neil Randel, CEO of First American and Managing Director of Merchant Services for Deluxe, added:
“Our entire team is looking forward to accelerating our growth by leveraging the extensive Deluxe distribution channels and reaching into their deep client base. Our businesses are complementary, and our cultures and values align making our combination natural.”
Deluxe, a Trusted Payments and Business Technology company, aims to help businesses “pay, get paid, optimize and grow.”
Deluxe offers various solutions to support small businesses, financial institutions and major brands. The company claims that it operates “at significant scale, processing more than $2.8 trillion in annual payment volume.”