Global Payments sells payroll unit for $1.1 billion

ATLANTA - Global Payments Inc. (NYSE: GPN), a prominent provider of payment technology and software solutions, has announced the sale of its Payroll business to Acrisure, a Michigan-based financial technology company, for $1.1 billion. This move is part of the company’s ongoing efforts to streamline its operations and focus on its core commerce solutions. According to InvestingPro data, the company currently trades at a P/E ratio of 12.2 and appears undervalued based on its Fair Value analysis.

The transaction, which is expected to be completed in the second half of 2025, pending regulatory approvals and customary closing conditions, will see Global Payments using the after-tax proceeds to return capital to shareholders while maintaining leverage neutrality. This aligns with the company’s shareholder-friendly approach, as InvestingPro data shows management has been aggressively buying back shares and maintaining dividend payments for 25 consecutive years.

Cameron Bready, CEO of Global Payments, expressed satisfaction with the company’s progress in its transformation program, which aims to simplify its business and increase shareholder value. Bready stated that this divestiture sharpens the company’s strategic focus, allowing it to invest more in differentiated markets and solutions. He also noted that the move positions the payroll business to benefit from greater scale and investment under Acrisure’s ownership.

In addition to the sale, Global Payments has entered into a mutual referral agreement and long-term commercial partnership with Acrisure. This partnership will enable Global Payments to continue offering fully integrated human capital management and payroll services to its merchant customers as part of its suite of commerce enablement solutions.

The divestiture of the Payroll business follows Global Payments’ recent agreements to sell its Issuer Solutions business and acquire Worldpay, as well as the completed sale of AdvancedMD. These transactions are part of the company’s strategy outlined at its September 2024 Investor Conference, which focuses on positioning Global Payments as a leading pure play commerce solutions provider for merchants of various sizes.

Global Payments, headquartered in Georgia, operates across 38 countries with 27,000 team members, and is a Fortune 500 company as well as a member of the S&P 500. The company assists businesses worldwide in enabling commerce and delivering exceptional customer experiences with its payment technology and software solutions.

This news is based on a press release statement from Global Payments Inc.

In other recent news, Global Payments Inc. has entered into a significant $7.25 billion unsecured revolving credit facility with Bank of America and other lenders, aimed at enhancing its financial flexibility. This facility includes an immediate $5.75 billion with an additional $1.5 billion contingent on the completion of the Worldpay Holdco, LLC acquisition. The credit line, which could be increased to $7.5 billion, replaces an existing agreement and is part of the company’s strategic financial planning. Meanwhile, analysts have been adjusting their outlooks on Global Payments’ stock. Bernstein lowered its price target to $95, expressing caution about the company’s strategic moves, while BMO Capital also reduced its target to $86, citing concerns about execution risks related to the Worldpay acquisition. Conversely, TD Cowen and KeyBanc have slightly increased their price targets to $84 and $90, respectively, reflecting a more optimistic view on the company’s medium-term growth potential. Analysts from KeyBanc noted stable merchant revenue growth and positive synergy opportunities from the Worldpay transaction. Despite varied analyst opinions, Global Payments’ recent financial maneuvers and strategic acquisitions indicate a focus on long-term growth and market positioning.

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