- Acquisition of largest provider of
integrated commerce solutions establishes Heartland as the leader
in the higher-education payments market
Heartland Payment Systems (NYSE:HPY), one of the nation's
largest payment processors and a leading provider of merchant
business solutions, announced today that it has entered into an
agreement to acquire TouchNet Information Systems, Inc., an
integrated commerce solutions provider to higher-education
institutions.
“I am extremely pleased to announce the acquisition of TouchNet,
which is not only Heartland’s largest acquisition to date, but is
also an excellent complement to our existing Campus Solutions
business that will immediately improve our growth profile and
contribute to our bottom line,” said Robert O. Carr, chairman and
CEO of Heartland Payment Systems.
TouchNet adds over 600 higher education clients serving over six
million students – nearly one-third of the higher-education
enrollment in the United States – to Heartland’s Campus Solutions
business. When combined with Heartland’s existing portfolio of
payments, loan servicing and other campus solutions, the
acquisition makes Heartland the largest provider of integrated
commerce solutions to the higher-education market.
“TouchNet will enable us to offer the higher education market an
end-to-end integrated commerce and payments solution that is
unmatched in the industry. We look forward to closing this
transaction in the near term to begin capitalizing on the growth
opportunities certain to arise as a result of our industry-leading
position,” Carr continued.
Daniel Toughey, president of TouchNet Information Systems, said,
“This is great news for our many loyal clients, employees and
partners. Heartland is a highly-respected, people-oriented company
with a strong vision for the future of electronic payments.”
“For 25 years, we have been carefully building a technology
success story and joining forces with the Heartland team will allow
us to expand our growth opportunities, which benefits the community
in Kansas City, where TouchNet’s existing 180 employees will
remain,” Toughey continued.
Since 1989, TouchNet has been a pioneer in delivering innovative
payment solutions. Colleges and universities have relied on
TouchNet to unify and secure payment and related business
transactions throughout the campus enterprise. TouchNet enables
institutions of higher education to process and manage the myriad
of campus payments – from student tuition to parking to alumni
donations to campus events – on one platform and through one
service provider.
So, while a campus may have many payment points, such as
centralized billing or box office collections at athletic venues,
and payment types, such as electronic payments and checks, TouchNet
provides a solution that school business offices can use to unify
the campus commerce and payment operations, generate detailed
reports, and enjoy a simplified customer service experience. This
allows institutions to exercise greater control over campus
transactions, costs, compliance and constituent satisfaction. The
software solution, known as U.Commerce®, is designed to unify the
campus enterprise, expand as the campus changes and deliver
integration and innovation.
The acquisition includes TouchNet’s software, customer base and
existing employees, including the management team. Its operations
will continue to be based in Lenexa, Kansas.
“With the acquisition, Heartland can now offer campus business
offices an end-to-end commerce solution that integrates the payment
processing capabilities of Heartland into the U.Commerce payment
system,” said Michael A. Lawler, president - strategic markets
group of Heartland Payment Systems. “This creates new growth
opportunities in a large and growing market where we have the
strongest franchise, and the leading share. As a result of the
acquisition, Heartland Campus Solutions will have relationships
with higher-education institutions from the smallest to the
largest, which we believe provides entrée to expand all of our
Campus Solutions products across this broad portfolio. As a result,
we believe our Campus Solutions business can sustain attractive
revenue growth rates and use our scale to expand already attractive
margins over time.”
Heartland is paying $375 million to acquire TouchNet and, on a
non-GAAP basis, expects the transaction to be slightly accretive in
2014, and to add at least $0.30 per share in 2015. In addition,
Heartland expects that this transaction will add over $60 million
to 2015 net revenue. The transaction is expected to close in the
third quarter of 2014, subject to regulatory approvals and
customary closing conditions.
Heartland has previously announced that it will be holding a
conference call on August 1, 2014, to discuss second quarter
earnings. Heartland intends to provide additional details and
address questions regarding the TouchNet acquisition during that
call.
Preston Todd Advisors served as advisor to Heartland Payment
Systems and Raymond James & Associates acted as financial
advisor to TouchNet.
About Heartland Payment Systems
Heartland Payment Systems, Inc. (NYSE: HPY), the fifth
largest payments processor in the United States, delivers
credit/debit/prepaid card processing, mobile
commerce, e-commerce, marketing solutions, security
technology, payroll solutions, and related business solutions
and services to more than 275,000 business and educational
locations nationwide. A FORTUNE 1000 company, Heartland
is the founding supporter of The Merchant Bill of Rights, a
public advocacy initiative that educates merchants about fair
credit and debit card processing practices. Heartland also
established The Sales Professional Bill of Rights to
advocate for the rights of sales professionals everywhere. More
detailed information can be found
at HeartlandPaymentSystems.com or follow the company on
Twitter @HeartlandHPY and Facebook
at facebook.com/HeartlandHPY
About TouchNet Information Systems, Inc.
Since 1989, TouchNet has been a pioneer in delivering innovative
payment solutions for Higher Education. Colleges and universities
have relied on TouchNet to unify and secure payment and related
business transactions throughout the campus enterprise. Today,
TouchNet offers institutions the industry's broadest spectrum of
commerce management solutions.
TouchNet(R) U.Commerce(R) systems help colleges and
universities save, make and manage money better by delivering
greater control over transactions, costs, compliance, operational
efficiencies, and information access. U.Commerce--it's How
Money Moves on Campus(R). For more information,
visit http://www.touchnet.com.
Forward-looking Statements
This press release contains statements of a forward-looking
nature which represent our management’s beliefs and assumptions
concerning future events. Forward-looking statements involve risks,
uncertainties and assumptions and are based on information
currently available to us. Actual results may differ materially
from those expressed in the forward-looking statements due to many
factors, including risks and additional factors that are described
in the Company’s Securities and Exchange Commission filings,
including but not limited to the Company’s annual report on Form
10-K for the year ended December 31, 2013. Given these risks and
uncertainties, prospective and current investors are cautioned not
to place undue reliance on such forward-looking statements. We
undertake no obligation to update any forward-looking statements to
reflect events or circumstances that may arise after the date of
this release.
Gibbs & SoellElizabeth McDonnell,
212-697-2600emcdonnell@gibbs-soell.com
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