CardConnect (CCN 15.15, +1.50) has jumped 11.0% in pre-market after agreeing to be acquired by First Data (FDC 16.64, 0.00) for $15 in cash, which translates to $750 million. The transaction includes the repayment of CardConnect's debt.
CardConnect is a payment processor that offers a suite of transaction management and tracking tools. The company allows customers to accept payments through multiple avenues, including point-of-sale terminals, mobile apps, desktop-based virtual terminals, and hosted payment pages. The company's payment system follows Payment Card Industry Data Security Standards and is outfitted with added security features. CardConnect serves roughly 67,000 customers.
The acquisition of CardConnect will expand First Data's already-considerable reach into payment and e-commerce processing. In addition to being tasked with processing more payments, First Data will benefit from the acquisition of CardConnect's technology. First Data Chairman and CEO Frank Bisignano echoed that sentiment, saying "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."
The transaction should be accretive to First Data's earnings in the first full year after the closing.