|[May 12, 2014]
Vantiv Announces Agreement to Acquire Mercury Payment Systems from Silver Lake
CINCINNATI & DURANGO, Colo. --(Business Wire)--
Inc. (NYSE: VNTV), a leading provider of payment
processing services and related technology solutions for merchants and
financial institutions of all sizes, announced today an agreement to
Payment Systems, LLC for an aggregate price of $1.65 billion.
Mercury is a payment technology and service leader whose solutions are
embedded into point-of-sale software applications and brought to market
through their dealer and developer partners. Mercury is currently
majority-owned by Silver Lake, a global leader in technology investing.
Vantiv is strategically focused on strengthening and expanding its
traditional Merchant and Financial Institutions businesses and continues
to invest in strategic partner channels, including integrated payments.
The acquisition of Mercury accelerates Vantiv's growth in the integrated
payments space, which is expected to increase significantly over the
next several years to potentially represent over 30% of total payments
volume by 20171. The transaction results in a combination of
leading technology, distribution and scale, which along with Vantiv's
presence in online and omni-channel commerce, significantly increases
Vantiv's penetration into high-growth channels.
"The emergence of integrated payment technology at the point-of-sale
delivers a differentiated merchant experience and creates a
highly-efficient, cloud-based delivery model for customer acquisition
and retention," said Charles Drucker, president and chief executive
officer of Vantiv. "By combining Mercury's distribution network and
innovative solutions with Vantiv's technology platform and products, we
are developing a payments eco-system that allows us to serve these
clients in new and exciting ways. Bringing the companies together will
dramatically enhance our distribution and technology capabilities to
serve a number of large and growing industry verticals."
Mercury features an extensive network of more than 3,000 point-of-sale
software developers and dealers that serve small and medium-sized
businesses across the U.S. and Canada. In 2013, Mercury generated net
revenue of $237 million, growing by 17% year-over-year, and adjusted
EBITDA of $93 million, growing by 23% year-over-year. Given Mercury's
strong double-digit growth, Vantiv expects the transaction to add one to
two percentage points to its net revenue growth per year. The
transaction is expected to be modestly accretive to non-GAAP earnings
per share in 2014, with accelerating accretion in 2015.
"Vantiv and Mercury are aligned in our desire to create integrated
software solutions that fulfill the specialized needs of merchants,"
said Matt Taylor, chief executive officer of Mercury. "Software
developers and dealers are helping to lead the way for the future of
payments, and combining with Vantiv puts us in a strong competitive
position to jointly offer a broader set of value-added products and
services to our partners and merchants."
"It has been a privilege to partner with Mercury, and we are very proud
of the company's accomplishments since our investment in 2010," said
Mike Bingle, a managing director and managing partner of Silver Lake.
"Mercury pioneered the offering of integrated payments solutions to
merchants and has driven rapid growth by leveraging its large network of
partners and pursuing innovative new technologies and services."
Since 2010, Silver Lake has partnered with Mercury on several
initiatives to position the company for long-term growth, including the
enhancement of Mercury's unique technology capabilities and expansion
into new product areas, service lines and industry verticals.
Vantiv's acquisition of Mercury and the prior acquisition of Element
Payment Services™, builds upon Vantiv's existing distribution channels,
which will increase the ability to provide an expanded set of payments
solutions, such as online and omni-channel commerce, to technology
partners and dealers. Mercury further expands Vantiv's reach into the
small and medium-sized business segment through Mercury's distribution
channel, complementary verticals and its ability to design integrated,
value-added innovations for the point-of-sale.
The transaction is expected to close in the second quarter of 2014,
subject to required U.S. antitrust clearance and other customary closing
conditions. Vantiv will fund the transaction with committed financing.
Matt Taylor and the Mercury management team will remain with the
company, which will maintain its locations in Colorado.
In view of the entry into the transaction, Mercury is suspending
activities related to its proposed initial public offering and, in
connection with the consummation of this transaction, will withdraw its
registration statement previouly filed with the U.S. Securities and
Credit Suisse acted as lead financial advisor and BofA Merrill Lynch
also acted as financial advisor to Vantiv, and Wachtell, Lipton, Rosen &
Katz served as its legal advisor. Morgan Stanley was the lead M&A
advisor to Mercury. Mercury was also advised by J.P. Morgan, Barclays,
and FT Partners. Simpson Thacher & Bartlett LLP acted as legal advisor.
Mercury will host a conference call to provide additional details, today
at 5:00 PM EDT. The conference call can be accessed live over the phone
by dialing +1.800.289.0746, or for international callers
+1.913.312.0839, and referencing conference code 6629583. A replay will
be available approximately two hours after the call concludes, and can
be accessed by dialing +1.888.203.1112, or for international callers
+1.719.457.0820, and entering replay passcode 6629583. The replay will
be available through Monday, May 26, 2014. Presentation slides to be
discussed during the conference call will be available for download
prior to the call on Vantiv's investor relations website at http://investors.vantiv.com/.
2012 Payments Study
About Vantiv, Inc.
(NYSE: VNTV) is a leading, integrated payment processor differentiated
by a single, proprietary technology platform. Vantiv offers a
comprehensive suite of traditional and innovative payment processing and
technology solutions to merchants and financial institutions of all
sizes in the U.S., enabling them to address their payment processing
needs through a single provider. We build strong relationships with our
customers, helping them become more efficient, more secure and more
successful. Vantiv is the third largest merchant acquirer and the
largest PIN debit acquirer based on number of transactions in the U.S.
The company's growth strategy includes expanding further into high
growth payment segments, such as integrated payments, payment
facilitation (PayFacTM), mobile, prepaid and information
solutions, and attractive industry verticals such as
business-to-business, ecommerce, healthcare, gaming, government and
education. For more information, visit www.vantiv.com.
Twitter (News - Alert): @Vantiv
LinkedIn (News - Alert):
Copyright Vantiv, LLC. All rights reserved. Vantiv, the Vantiv logo, and
all other Vantiv product or service names and logos are registered
trademarks or trademarks of Vantiv, LLC in the USA and other countries.
® indicates USA registration.
Systems is transforming how small- and medium-sized merchants transact
business. Founded in 2001 with a vision to streamline and safeguard
commerce and payments, Mercury is now one of the fastest growing payment
technology companies in the U.S. and the winner of multiple industry
awards. Mercury's payments technology is integrated into a broad set of
point of sale systems, reaching merchants through an extensive partner
network of over 3,000 point of sale software developers and value added
resellers. Mercury's customer service and value-added solutions
distinguish the company from its competitors and help merchants conduct
over $30 billion per year in commerce. For more information, visit www.mercurypay.com
or the company's headquarters in Durango, Colo.
About Silver Lake
is a global leader in private investments in technology and
technology-enabled industries. Silver Lake invests with the strategic
and operational insights of an experienced industry participant. The
firm has approximately 110 investment and value creation professionals
located in New York, Menlo Park, San Mateo, London, Hong Kong, Shanghai
and Tokyo and manages more than $23 billion in combined assets under
management. The Silver Lake Partners portfolio includes or has included
technology and technology-enabled industry leaders such as Alibaba,
Allyes, Ameritrade, Avago, Business Objects, Dell, Flextronics (News - Alert), Gartner,
Gerson Lehrman Group, Global Blue, Go Daddy, Instinet, Intelsat,
Interactive Data Corporation, MCI, Mercury Payment Systems, MultiPlan,
the NASDAQ OMX Group, NetScout, NXP, Sabre, Seagate Technology (News - Alert), Skype,
Spreadtrum, SunGard Data Systems, UGS, Vantage Data Centers, Virtu and
William Morris Endeavor. For more information about Silver Lake and its
entire portfolio, please visit www.silverlake.com.
press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 related to Vantiv,
Mercury and the acquisition of Mercury, including the potential benefits
of the acquisition. Forward-looking statements involve risks and
uncertainties, and actual events or results could differ materially from
those discussed. Statements that are not historical facts, including
management's expectations regarding future events and developments, are
forward-looking statements and are subject to significant risks and
uncertainties. Factors that could cause actual events or results to
differ materially from those expressed in or implied by these
forward-looking statements include general economic conditions, future
performance and integration of acquisitions including Mercury, the
ability to keep pace with rapid developments and change in our industry
and provide new services to our clients, competition within our
industry, reductions in overall consumer, business and government
spending, a decline in the use of credit, debit or prepaid cards,
failures of our systems or the systems of our third party providers,
unauthorized data or security breaches, inability to expand our market
share in existing markets or expand into new markets, increased
attrition of merchants, independent sales organizations, dealers,
developers or referral partners, and the factors discussed under the
headings "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Vantiv's Annual Report
for the year ended December 31, 2013 and its Quarterly Report on Form
10-Q for the quarter ended March 31, 2014 and in Vantiv's other filings
made from time to time with the SEC (News - Alert), copies of which may be obtained by
visiting the company's Investor Relations web site at http://investors.vantiv.com/
or the SEC's web site at (http://www.sec.gov/).
The forward-looking statements included in this press release represent
Vantiv's and Mercury's views as of the date of this press release. These
forward-looking statements should not be relied upon as representing
Vantiv's or Mercury's views as of any date subsequent to the date of
this press release. Neither Vantiv or Mercury undertakes any intention
or obligation to publicly update or revise any forward-looking statement
to conform the statement to actual results or to changes in
expectations, whether as a result of new information, future events or
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