Dive Brief:
- Although outgoing Global Payments CEO Jeff Sloan doesn’t envision the company doing more large merger and acquisition deals any time soon, a purchase in the business-to-business payments space may be the exception, he said this week.
- “We’re in a bit of a land grab in the B2B environment,” Sloan said during a Tuesday appearance at a conference sponsored by SVB MoffettNathanson, a research arm for the SVB Financial Group.
- The Atlanta-based payment processor’s U.S. sales staff has grown by a multiple of 10 during Sloan’s decade as CEO, expanding from about 150 to 1,500, he said. Global Payments currently has 30 employees selling its B2B services exclusively, and that number “needs to be 300,” Sloan said.
Dive Insight:
Global Payments has been on a deals streak recently, and with its $4 billion acquisition of Evo Payments completed during the first quarter, “we have all the elements of what we need to have a successful business,” Sloan said at the conference focused on technology, media and telecom. In the near term, “I would look for us to do more product-centric releases than more whole company deals,” he said.
Still, “the one exception to that might be B2B,” said Sloan, who is stepping down from the CEO role. Cameron Bready, the current president and chief operating officer, is set to become the company’s next CEO June 1.
The company’s B2B business is only responsible for 1% or 2% of the company’s revenue currently, Sloan said. Global Payments reported full-year revenue of $8.98 billion in 2022, according to a company release. Sloan said he sees the current opportunity in B2B similar to that of e-commerce in the late 1990s.
The Evo acquisition bolsters the company’s ambitions in the B2B space, and Sloan also pointed to Global Payments’ 2021 acquisition of B2B software company Mineral Tree and the virtual card issuing capabilities it has through TSYS, which Global Payments merged with in 2019.
Sloan envisions Global Payments growing its B2B revenue to $1.5 billion, without specifying a timeframe, “and I think that’s where Cameron’s focused,” he said of his successor.
Fueling that requires organic growth, “but you’ve got to augment that with getting additional scale,” Sloan said.
During a Wednesday appearance at the Barclays Emerging Payments and Fintech Forum where Sloan and Bready spoke together, Bready agreed that the company has collected the right assets to offer comprehensive B2B services, but M&A remains a lever the company can pull to accelerate its presence in the space.
“We’re going to use our balance sheet appropriately to continue to support that strategy,” Bready said.
In recent notes to investor clients, analysts who cover Global Payments expressed surprise about the May 1 announcement that Sloan would exit the CEO post. The company “abruptly announced” that Sloan was being replaced by Bready June 1, “causing many to be skeptical about the outlook for the business,” RBC Capital Markets analysts wrote in a May 7 note to investor clients.
With recent acquisitions and divestitures completed and the COVID-19 pandemic ebbing, it felt like the right time to step down as CEO, Sloan said Tuesday. “This is the best time in the last three and a half years, really, going back to the completion of the merger with TSYS in the fall of ‘19, for us to consider something like this,” he said.
Sloan said he met with the company’s board twice per year to talk about succession plans, and Sloan had recommended Bready as his successor for the last 18 months.
RBC Capital Markets analysts wrote in a recent note to investor clients that there are “theories galore on where the departing CEO will end up.”
Sloan serves on a number of company boards and anticipates picking up a few more board seats, he said Wednesday. He dismissed the idea of running another company, expressing more interest in private equity or venture capital investing.
