First Data Corporation, a global leader in commerce-enabling technology and solutions, and CardConnect Corp., a technology-oriented commerce solutions provider, announced that they have entered into a definitive merger agreement for First Data to acquire all of the outstanding shares of common stock of CardConnect for $15.00 per share in cash. The transaction is expected to be modestly accretive to First Data’s adjusted EPS in the first full year post-closing, before expected synergies.

CardConnect is an innovative provider of payment processing and technology solutions and is one of First Data’s largest distribution partners. It processes approximately $26 billion of volume annually from about 67,000 merchant customers which are served by CardConnect’s large base of distribution partners.

“This transaction is consistent with our strategy of integrating and scaling innovative technologies across our distribution footprint to better serve our partners and customers,” said First Data Chairman and CEO, Frank Bisignano. “CardConnect is a long-standing First Data distribution partner and we are excited to incorporate their state-of-the-art solutions across some of our most important strategic initiatives such as partner-centric distribution, integrated payments, and enterprise payments solutions.”

“We are thrilled with the opportunity for CardConnect to partner with an organization that has the world class capabilities of First Data,” said CardConnect President and CEO, Jeff Shanahan. “This transaction improves our ability to innovate and deliver leading technology-oriented commerce solutions to our combined customer base. In addition, we believe our growth trajectory improves with First Data’s breadth of products and its powerful distribution network.”

Transaction Terms

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 $15.00 per share in cash, followed by a merger in which each share of CardConnect common stock not tendered will be converted into the right to receive $15.00 per share in cash. The aggregate transaction value is approximately $750 million, including repayment of CardConnect’s outstanding debt and the redemption of CardConnect’s preferred stock. First Data intends to fund the transaction with a combination of cash on hand and funds available under existing credit facilities.  

The merger agreement has been unanimously approved by CardConnect’s Board of Directors. In addition, CardConnect shareholders holding approximately 40% of CardConnect common stock have entered into tender and support agreements agreeing to tender their shares of common stock into the tender offer and support the transaction. The transaction is subject to the tender of a majority of the outstanding shares of CardConnect common stock as well as other customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The parties expect the transaction to close in the third quarter of 2017.  

Allen & Company LLC acted as the exclusive financial advisor to First Data and Weil, Gotshal & Manges LLP acted as its legal advisor. Financial Technology Partners LP and FTP Securities LLC (collectively, “FT Partners”), served as exclusive financial and strategic advisor to CardConnect, and Wachtell, Lipton, Rosen & Katz acted as CardConnect’s legal advisor.