First Data to Acquire CardConnect

By Chris Lange Updated Jan 12, 11:33AM EST · Published May 30, 12:05PM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

First Data to Acquire CardConnect — © Thinkstock

Shares of CardConnect Corp. (NASDAQ: CCN) shot up on Tuesday after it was announced that First Data Corp. (NYSE: FDC) would be acquiring the company. First Data will pay $15 per share in cash for all outstanding shares of CardConnect. The parties expect the transaction to close in the third quarter of 2017.

Under the terms of the agreement, a subsidiary of First Data will commence a tender offer to acquire all the outstanding CardConnect common stock for a purchase price of $15 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 per share in cash.

The transaction value is roughly $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.

CardConnect is a payment processing and technology solutions company, and it is one of First Data’s largest distribution partners. The firm processes about $26 billion of volume annually from about 67,000 merchant customers that are served by CardConnect’s large base of distribution partners.

[nativounit]

Frank Bisignano, First Data’s board chair and chief executive, commented:

This transaction is consistent with our strategy of integrating and scaling innovative technologies across our distribution footprint to better serve our partners and customers. 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.

Shares of First Data were up 1% at $16.81 on Tuesday, with a consensus analyst price target of $18.66 and a 52-week trading range of $9.90 to $17.01.

CardConnect traded up 10%, at $15.05 in a 52-week range of $8.70 to $15.15. The consensus price target is $17.00.

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.