Fiserv → First Data
The all-stock deal that opened the 2019 payments consolidation wave: a core-banking vendor absorbing the largest US merchant acquirer and the owner of the Clover point-of-sale platform, at $22bn in equity and about $41bn including First Data's debt.
The all-stock deal that opened the 2019 payments consolidation wave, joining core banking software with a merchant acquirer.
- Value
- $22B
- Announced
- January 2019
- Completed
- July 2019
- Sector
- Payments
- Deal type
- acquisition
- Acquirer
- Fiserv (United States)
- Target
- First Data (United States)
Why it mattered
Fiserv processed transactions for thousands of US banks and credit unions; First Data, taken private by KKR in 2007 and re-listed in 2015 still carrying much of that buyout's debt, acquired for merchants and ran the STAR debit network. The combination was sold as $900m of cost savings and $500m of revenue synergies from selling merchant acquiring through Fiserv's bank channel, and it was priced at a discount to the sector because First Data's leverage limited its options. Frank Bisignano, First Data's chief executive, took the combined company's top job — unusual for the target's leader, and a signal of which business the market thought had the growth.
Of the three 2019 mega-deals, this is the one whose thesis held. Clover became one of the fastest-growing small-business payments platforms in the US, the bank channel did sell acquiring, and Fiserv's shares outperformed both FIS and Global Payments over the following five years. The difference from FIS–Worldpay was in what was bought: an acquirer with a product merchants chose, rather than a processor whose merchants were being taken by better products.
What it left behind
Fiserv's later moves were about Clover and about payments infrastructure — a bank charter application, stablecoin settlement pilots — rather than about more acquisitions of scale. The deal is the counter-example to Worldpay in the same year's wave: consolidation worked where the acquired business owned the merchant relationship and the software at the point of sale.