TSYS to Acquire TransFirst in $2.35B Deal

Staff Report From Columbus CEO

Wednesday, January 27th, 2016

TSYS, a leading global payment solutions provider, announced it has entered into a definitive agreement with Vista Equity Partners to acquire TransFirst, a Vista portfolio company and leading U.S. merchant solutions provider, in an all-cash transaction valued at approximately $2.35 billion. TransFirst delivers merchant solutions to more than 235,000 small and medium-sized businesses in the U.S. through its proprietary technology, end-to-end customized and multi-channel products and superior customer service. The transaction enhances TSYS’ offering and position in the high-growth areas of integrated payments, e-commerce and omni-channel services.

As a result of the transaction, TSYS will be the 6th largest U.S acquirer based on net revenue, supporting more than 645,000 merchant outlets. TSYS expects the transaction to be accretive in the low double digits to adjusted EPS for the first twelve-month period following closing, excluding one-time acquisition-related fees and expenses.

TransFirst leads the market with its partner-centric distribution model supporting more than 1,300 integrated technology and referral partners in high-growth areas that include Integrated Software Vendors, healthcare, not-for-profit, referral banks, associations and e-commerce. TransFirst has approximately 1,000 employees with offices throughout the U.S.

M. Troy Woods, chairman, president and chief executive officer of TSYS, said, “TransFirst significantly increases our scale and opportunity within the highly attractive merchant space, and particularly the profitable and fast-growing small and medium-sized business segment. With the added strength of TransFirst, TSYS will be uniquely positioned with significant scale and strength across issuer processing, merchant services and prepaid program management. I believe our ability to offer market-leading services through this distribution network and across the payments spectrum will be unmatched. I have every confidence that TransFirst’s strong leadership team, reputation and focus on outstanding customer service will further our pursuit to unlock opportunities in payments and deliver strong results for TSYS, our customers and shareholders over the long-term.”

John Shlonsky, TransFirst president and chief executive officer, said, “TransFirst is excited about this transaction and the opportunities it will create. We believe the combination of our two organizations will form an even stronger platform for us to grow new sales, provide more robust solutions for our partners and merchants, and expand an already outstanding service model. We also see a strong cultural fit with TSYS and share their philosophy that people are at the center of payments. Together I’m convinced we will be a strong leader in an increasingly competitive payments market.”

Robert F. Smith, founder, chairman and chief executive officer of Vista Equity Partners, said, "We are grateful to John and the TransFirst team for their strong partnership, during which time they created a true leader in payment solutions. We are proud of the company’s tremendous growth under our ownership and believe the combination with TSYS's merchant business will create a strong platform for accelerating TransFirst’s future growth trajectory."

Effective with the closing of the transaction, Mark Pyke, senior executive vice president and president of the TSYS Merchant segment, will be leaving TSYS after six years of service to pursue a new professional challenge in the payments industry. Mr. Shlonsky will assume Mark’s duties and responsibilities for the combined businesses at that time. Mr. Woods added, “During Mark’s tenure at TSYS, he has helped create a more focused strategy for our merchant business and developed a strong team with the expertise and passion to win. All of us at TSYS thank Mark for his contributions and we wish him the very best in his future pursuits.”

The Board of Directors of TSYS has approved the transaction, which is expected to close in Q2 2016, subject to regulatory approvals and other customary closing conditions.

Bank of America Merrill Lynch and GCA Savvian Advisors, LLC are acting as financial advisors, First Annapolis Consulting is acting as strategic advisor and King & Spalding LLP is acting as legal advisor to TSYS. Credit Suisse, Goldman Sachs and J.P. Morgan are acting as financial advisors and Kirkland & Ellis is acting as legal advisor to TransFirst and Vista.