A big transaction to process: First Data to acquire CardConnect
Transaction processing and payment solutions providers First Data and CardConnect Corp., have entered into a definitive merger agreement under which First Data will acquire CardConnect for approximately $750 million.
CardConnect is one of First Data’s largest distribution partners, according to the release. The company processes approximately $26 billion of volume annually from about 67,000 merchant customers served by large base of CardConnect distribution partners.
Under the terms of the definitive merger agreement between the parties, a subsidiary of First Data will commence a tender offer to acquire all of the outstanding CardConnect common stock for a purchase price of $15 per share in cash. The offer will be followed by a merger in which each share of CardConnect common stock not tendered will be converted into the right to receive $15 per share in cash.
The aggregate transaction value is approximately $750 million, including repayment of the CardConnect’s outstanding debt and redemption of its preferred stock. First Data intends to fund the transaction with a combination of cash on hand and funds available under existing credit facilities, the release said.
The merger agreement has been unanimously approved by CardConnect’s Board of Directors. CardConnect shareholders representing approximately 40 percent of the company’s common stock also have agreed to tender their shares of common stock in and support the transaction, which is expected to close in Q3.