US-based EFT outfit Transaction Systems Architects (TSA) is to acquire cash management systems house P&H Solutions for $150 million in cash, in a transformational deal engineered to anticipate a forthcoming convergence of bank retail and wholesale payments businesses.
TSA says the acquisition will expand its wholesale payments portfolio and form the core of an emerging ASP strategy to rent out its software to smaller financial services firms.
Philip Heasley, TSA CEO says the management and infrastructure of P&H will provide "a natural platform for our Base24-es, Proactive Risk Manager, Payments Manager, Smart Chip Manager and Wholesale Payments System solutions to be provided on a services basis to smaller financial institutions, first in the US and later throughout the world."
P&H employs 250 staff and has approximately 100 customers including 12 of the top 25 banks in the United States. For the fiscal year ending September 30, 2007, P&H is expected to turnover between $40 million to $42 million.
The acquisition will be financed by a combination of TSA cash and a portion of a $150 million revolving credit facility provided by Wachovia Securities.
The deal is expected to be concluded next month, at which point TSA's base in Framingham, Massachusetts will be integrated with P&H operations in neighbouring Newton.
Ralph Dangelmaier, president and CEO of P&H, will become the president of TSA's global "software as a service" business.