The news: Digital payments giant Global Payments will acquire US-based EVO Payments, which offers payment technology and acquiring services, in an all-cash deal valuing EVO at $4 billion, per a press release.
Why it’s worth watching: EVO Payments will support three key initiatives for Global Payments—helping the firm sustain revenues, which grew 8% on a constant currency basis in Q2, compared with 28% YoY in the same period last year.
Our take: Economic uncertainty may have informed Global Payments’ decision to acquire EVO Payments.
The company might be able to navigate economic headwinds by using EVO to focus on scaling in-demand solutions and driving payment efficiencies. Further solidifying that focus and minimizing operating costs, it also agreed to sell the consumer assets of Netspend, the firm’s prepaid card unit.
The bigger picture: A series of megamergers in 2019 led to substantial consolidation in the payments space as payment providers snapped up companies to help them quickly scale and keep up with digitization in commerce.
As weakening economic signals raise fears of a broader slowdown, there could be another round of megamergers in the payment space that further increases consolidation.
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