Thomas Fuller | SOPA images | Light rocket | Getty pictures
Company: Global Payments Inc (GPN)
Business: Global payments is a payment technology company that offers its customers software and services worldwide. Through the Merchant Solutions segment, it offers payment technology and software solutions worldwide for companies with small and medium sizes and selected customers with medium market and companies. It offers authorization, comparison and financing services, customer support, refusal refusions, reconciliation and dispute management services, terminal rental, sales and provision, payment security services, consolidated billing and reporting. It offers a number of software solutions for company management that rationalize customers in numerous vertical markets. Through the emittent Solutions segment, it offers financial institutions and retailer technologies to manage your card portfolios. It offers flexible commercial payments, accounts, paying and electronic payment solutions that support B2B payment processes for companies and governments.
Market value: $ 19.98b ($ 81.93 per share)
Stock Diagram -iconstock -Igram -Symbol
Global payments in 2025
Activist: Elliott Investment Management
Property: n/a
Average costs: n/a
Activist comment: Elliott is a very successful and clever activist investor. The company of the company includes analysts of leading technical equity companies, engineers, company partners -former technology CEO and COOS. When evaluating an investment, the company also hires special and general management consultants, expert cost analysts and industry specialists. Elliott often observes companies many years before investing and has an extensive stable impressive board candidates. The company has historically focused on strategic activism in the technology sector and was very successful with this strategy. However, their activism group has grown in recent years, and Elliott has carried out much more governance -oriented activism and creates value from a much larger width of companies.
What happens
Elliott has taken a position in global payments.
Behind the scenes
Global payments are a leading provider of payment processing and software solutions that have chosen small and medium-sized dealers and selected customers with medium market and companies. The company works via two segments: dealer solutions and issuing solutions. Merchant Solutions, which contribute around three quarters of total sales, offers payment solutions with which customers can accept card, check and digital payments that offer approval, billing, financing and other services. Simply expressed, global payments as a dealer acts as a middleman between the dealer and the card network to authorize and facilitate transactions. Through the Solutions segment, global payments offers comprehensive trade solutions that support the payment ecosystem for issuers through offers such as core processing, enterprise toking and more. This segment was founded in 2019 after the combination of global payments and overall system services (“TSYS”) in an all-stock fusion of Gleichen to create a leading payment company that is present both in the acquisition of dealers and in issuing.
A highlight of around $ 220 per share in 2021 and a company value for profits before interest, taxes, depreciation and amortization (EV/EBITDA) with more than $ 80 per share and a high individual amount. Despite the global slowdown of the transactions and the focus, the company managed to step on small and medium -sized companies during pandemic. However, sales growth has slowed down since 2020, now under the nuclear growth growth rate of the market, which implies that market shares for disorders such as stripe, Fiservs Clover, Shopify and other losses for stripe imply. It's all very interesting, but not what this activist campaign is about. This is about a company that has made a poorly preserved “bet on the farm” anaequisition and is now at a turning point that will determine its future.
On April 17, global payments announced that it had agreed to acquire World Pay from Fidelity National Information Services (FIS) and private equity company GTCR. In the three-way acquisition of cash-and-shaique acquisitions, global payments were also sold in a business with a value of $ 24.25 billion and solutions of $ 13.5 billion, which rated WorldPay. According to the announcement, the shares of the global payments decreased by 17% for many good reasons: (i) According to management, this acquisition was announced to Investor Day on its day 2024 to pursue more shareholders, sales and at most small bolt-on acquisitions (II) management, has bad recording of integration (or Not in the integration of integration.
However, the good news is that failure is evaluated. Management is of the opinion that the World Pay transaction for global payments is strategically sensible and that the business model is simplified in a provider of Pure-Play Commerce Solutions and will provide annual cost synergies of $ 600 million and sales synergies of $ 200 million. The market does not believe or have little trust that management can reach these synergies. From the place where the shares are traded today when management almost reach these synergies and perform this transaction, this will be a nice return for shareholders. What this company currently needs is help with execution and improved credibility, and Elliott can provide both.
There are companies that could use the representation of shareholders on the board and companies that they need. Global payments are much closer to the latter. A reconstituted board who is responsible for management is committed to an M&A moratorium and adds members with experience in the integration of large acquisitions, the confidence of investors will be restored to the company almost immediately. After that, the board can start to remove the shares at the right time and possibly buy back if the shares of the global payments are still significantly undervalued. We would also expect the board to do what the boards do – to supervise and assess the management, but we do not believe that there would be material changes in administrative before such a large acquisition as it.
In view of the almost universal opposition to the World Pay acquisition and the low trust in management, we would expect Elliott to go on this board with a reasonable plate. In a controversial situation for the 10-person university board with a universal proxy card, global payments would almost certainly be considerable defeat. Elliott recently won two out of four seats in Phillips 66 in a proxy fight with a much higher level of difficulty. Almost two decades ago, the fund was primarily registered as an activist as an activist as a strategic activist in technology companies, so that the companies that sell companies or take part in the acquisition achieved excellent returns. Since then, however, Elliott has developed into a much broader and comprehensive activist in strategy, sector and geography. Today the company often makes its best activism from the board of the board. We believe that a reconstituted board that includes an Elliott representative will restore the trust of investors and increase the likelihood of successful integration of WorldPay.
Ken Squire is the founder and president of 13D monitor, an institutional research service for shareholders, and the founder and portfolio manager of the 13D Activist Fund, an investment fund that invests in an activist 13D investment.