Fiserv and Amadeus IT Group are competing to acquire Shift4 Payments, a payment processor with a market value of nearly $7 billion. According to a report by Reuters, both Fiserv and Amadeus are preparing to present final bids for the acquisition in the upcoming weeks.
This acquisition will grant the winning bidder access to Shift4's extensive network and market influence. The company has a diverse clientele spanning restaurants, casinos, hotels, and sports teams like the San Francisco 49ers. Shift4 processes over $200 billion of transactions annually for more than 200,000 customers.
A Lucrative Acquisition Target?
Despite the challenges posed by the COVID-19 pandemic, Shift4 Payments reportedly experienced notable growth fueled by the surge in digital payment adoption. However, the landscape remains competitive, with players grappling to sustain momentum amidst heightened competition and inflationary pressures.
Shift4's recent fourth-quarter earnings report and an optimistic outlook for 2024 have boosted its appeal as an acquisition target. Additionally, remarks from the firm's CEO, Jared Isaacman, regarding exploring strategic opportunities and alternatives have fueled speculation.
While Shift4 has not disclosed the details about the acquisition , reports suggest that several companies have expressed interest in acquiring the company. The potential acquisition of Shift4 Payments underscores the ongoing trend of consolidating entities within the financial services sector.
Consolidation in the Financial Sector
For Fiserv, which previously acquired First Data for $22 billion, the acquisition of Shift4 could solidify its position as a key player in the payment processing arena. Recently, high-profile deals, including Capital One's acquisition of Discover Financial and Nasdaq's purchase of Adenza, have been concluded in the financial space.
Last year, Fiserv raised its financial projections following a surge of 108% in earnings per share (EPS). The company reported a growth of 8% in revenue, amounting to $4.87 billion compared to the previous year. The firm's segments driving this growth include an increase of 12% in the Acceptance sector and a rise of 4% and 5% in the Fintech and Payments segments, respectively.
Subsequently, the company reviewed its full-year revenue outlook for 2023 to a growth of 11%, alongside an anticipated improvement of15% to 16% in adjusted EPS.
