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Global Payments (GPN) Acquires AdvanceMD to Boost Revenues

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Global Payments Inc. (GPN - Free Report) recently announced the completion of its pending acquisition of AdvancedMD from Marlin Equity Partners. On closure, the buyer company expects the transaction to contribute nearly $7-$8 million revenues. However, the acquirer anticipates no positive effect on its earnings per share.

AdvanceMD is a leading provider of cloud-based software as a service or SaaS solutions to small-to-medium-sized physician practices in the United States. This buyout in turn, will enable the company to add an impetus to its technology-driven software-oriented scheme toward a 60% target set at its Investor Day in March.

Global Paymentshas been aggressively working on its vertical strategy to enhance its scale and size over the past few quarters. One of the most significant acquisitions by the company is the purchase of Heartland Payments Systems in 2016, which helped it boost its small and medium-sized enterprise distribution, customer base as well as its vertical reach in the United States.

Other integrations including the assets of FIS Gaming Business, Pay and Shop Limited, Ezidebit, PayPros, eWay, the communities and sports divisions of ACTIVE Network have been added to Global Payments’ business portfolio that has accrued to its top line growth.

Earlier this year, the company collaborated with Aspira, a camp ground reservation software management platform. The pattern implies that the company has full intention to capture the software vertical platforms whether through purchases or partnerships. Its revenues witnessed a CAGR of 12.8% between 2007 and 2017. The momentum continued into the first half of 2018 with the top-line improving 21%.

With ever-increasing demand for electronic payment transactions, the company enjoys ample growth opportunities at the moment. For 2018, it estimates the adjusted revenues to be somewhere between $3.9 billion and $3.975 billion.

Shares of this Zacks Rank #3 (Hold) company have rallied nearly 11% quarter to date, outperforming its industry’s growth of 4.6%.


Stocks to Consider

A few better-ranked stocks from the same sector are and Cardtronics PLC (CATM - Free Report) , Total System Services, Inc. (TSS - Free Report) and Evertec, Inc. (EVTC - Free Report) .

Cardtronics offers automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. This Zacks Rank #1 (Strong Buy) player managed to deliver an average trailing four-quarter beat of 27.17%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Total System provides payment processing, merchant and related payment services to financial and nonfinancial institutions worldwide. It carries a Zacks Rank #2 (Buy). In the preceding four quarters, the stock pulled off an average positive surprise of 7.67%.

EVERTEC engages in transaction processing business, serving financial institutions, merchants, corporations and government agencies in Latin America and the Caribbean. Carrying a Zacks Rank of 2, the company came up with an average earnings surprise of 11.84% over the last three of four quarters.

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