Vantiv, a provider of payment processing services and related technology solutions for merchants and financial institutions, today announced an agreement to acquire Mercury Payment Systems LLC for an aggregate price of $1.65 billion, according to a joint press release from the companies.

Mercury is a payment technology and service company whose solutions are embedded into point-of-sale software applications and brought to market through its dealer and developer partners. Mercury is currently majority-owned by Silver Lake, a global technology investment firm.

Vantiv’s acquisition of Mercury accelerates Vantiv’s growth in the integrated payments space, which is expected to increase significantly over the next several years to potentially represent more than 30 percent of total payments volume by 2017, according to the press release.

"The emergence of integrated payment technology at the point of sale delivers a differentiated merchant experience and creates a highly efficient, cloud-based delivery model for customer acquisition and retention," Charles Drucker, president and CEO of Vantiv, said in a press release. "By combining Mercury’s distribution network and innovative solutions with Vantiv’s technology platform and products, we are developing a payments ecosystem that allows us to serve these clients in new and exciting ways. Bringing the companies together will dramatically enhance our distribution and technology capabilities to serve a number of large and growing industry verticals."

Mercury features a network of more than 3,000 point-of-sale software developers and dealers that serve small and medium-sized businesses across the U.S. and Canada, according to the press release. In 2013, Mercury generated net revenue of $237 million, growing by 17 percent year-over-year, and an adjusted EBITDA of $93 million, growing by 23 percent year-over-year. Given Mercury’s double-digit growth, Vantiv expects the transaction to add one to two percentage points to its net revenue growth per year. The transaction is expected to be modestly accretive to non-GAAP earnings per share in 2014, with accelerating accretion in 2015.

"Vantiv and Mercury are aligned in our desire to create integrated software solutions that fulfill the specialized needs of merchants,” Matt Taylor, CEO of Mercury, said in a statement. "Software developers and dealers are helping to lead the way for the future of payments, and combining with Vantiv puts us in a strong competitive position to jointly offer a broader set of value-added products and services to our partners and merchants."

The transaction is expected to close in the second quarter of 2014, subject to required U.S. antitrust clearance and other customary closing conditions. Vantiv will fund the transaction with committed financing. Matt Taylor and the Mercury management team will remain with the company, which will maintain its locations in Colorado.

In view of the entry into the transaction, Mercury is suspending activities related to its proposed initial public offering and, in connection with the consummation of this transaction, will withdraw its registration statement previously filed with the U.S. Securities and Exchange Commission.