Global Payments has attracted headlines this week over potential acquisitions it might make, but in an earnings call with analysts CEO Cameron Bready was more ready to talk about parts of the company that might be pared.
In addressing “potential portfolio pruning,” Bready told analysts on Wednesday that “there is some chance that that'll be in the cards for 2024,” even though the company doesn’t currently have any such shaving of the business contemplated in its outlook for the year.
“It is something that we're continuing to evaluate, and it's really in the context of making sure that, as we think about investing in the business, that we're investing in those areas where we have scale, we have differentiation, we have prospects to be able to continue to grow the business at attractive rates,” Bready said.
Atlanta-based Global Payments provides payment processing services to merchants as well as software services to card issuers. The company reported fourth-quarter net income rose 45% to $361.3 million as revenue climbed 8% to $2.4 billion, according to a Wednesday press release.
Bready explained further that Global Payments seeks to avoid investing in less attractive areas. The company is “trying to minimize investment, minimize resources and management attention that's focused on markets that may be subscale or in a line of business where we don't have particular differentiation, and we don't see greater prospects to meaningfully impact the business moving forward,” he said. “Obviously, if we make decisions around that, we'll provide updates as we work through the year, but it is certainly something that we're contemplating.”
Those comments come after a news report from the media outlet Reuters that Global Payments is circling a potential purchase of the U.K. payments processing business Takepayments. A Global Payments spokesperson didn't immediately respond to a request for comment.
Bready declined to comment on any specific potential acquisitions, but did note that Global Payments is open to pursuing mergers and acquisitions.
“From an M&A perspective, we're open-minded,” the CEO said. “We're very deliberate, I think, in terms of how we think about M&A that's going to fit our strategy.”
Bready noted that any acquisition has to offer returns on capital comparable to what Global Payments might see from other uses of its capital, including potential buybacks of the company’s stock.
Executives on the call did express an interest in expanding in Europe. For instance, Global Payments is building its business in Germany with a joint venture it’s launching with the German bank Commerzbank in the first half of this year and via its acquisition of Evo. “It's an opportunity to grow and scale a more meaningful business in Germany over a long period of time,” Bready told analysts.
