Dive Brief:
- Payments processor Fiserv is largely focused on “tuck-in type” deals, as its mergers and acquisitions team assesses opportunities, Fiserv CFO Bob Hau said Thursday during an investor conference.
- Most of Fiserv’s acquisitions have been moderately sized, Hau noted during his appearance at the Wolfe Fintech Forum. Of the approximately $2 billion Fiserv has spent on about 15 acquisitions over the past four years, the Milwaukee, Wisconsin-based company paid roughly $150 million per deal, he said.
- Fiserv doesn’t have size constraints as it considers M&A opportunities in the next year, Hau said. “The dry powder is there,” he said. Hau is “not focused on a particular range, I’m looking for value-accretive opportunities, and if that means putting to work more capital, in a larger opportunity, we’d definitely do that.”
Dive Insight:
Fiserv has been an active acquirer in payments in recent years, scooping up fintech Ondot, restaurant marketing and commerce company BentoBox, multiple independent sales organizations and payment service providers in South America.
Its acquisition of core banking software provider Finxact for $650 million, completed in 2022, was the largest in the past four years.
When Wolfe Research Analyst Darrin Peller asked if Fiserv has any gaps it’s looking to fill through M&A, Hau said there are always opportunities to improve, either from delivery or solutions standpoints. In many cases, Fiserv partners with other companies. Many of those partnerships end up being M&A opportunities, Hau noted.
Hau declined to comment on the Reuters report last month that Fiserv is considering buying payments processor Shift4. Fiserv CEO Frank Bisignano also wouldn’t comment when asked about the report last month, but said he feels “very comfortable about our ability to buy companies.”
Frustrated with the company’s public market valuation, Shift4 executives have said that company is exploring strategic alternatives; CEO Jared Issacman said late last year Shift4 has fielded acquisition interest from “several parties.”
Analysts with Mizuho Securities this week weighed in on the potential acquisition, noting such a deal could help accelerate Fiserv’s merchant acquiring growth in North America, and diversify Fiserv’s revenue mix in merchant acquiring by exposing it to more restaurant and hospitality merchants.
“We believe (Shift4) can help (Fiserv) deepen its reach in hospitality & restaurant verticals,” analysts wrote in the Wednesday note to investors. “This would reduce Clover’s brick and mortar exposure risk (e.g. as retail increasingly goes online over time),” analysts wrote, referring to Fiserv’s point-of-sale unit for small and medium-sized businesses.
